The shift from coins to paper currency in various dynasties was influenced by several factors, and one of them is indeed that currency was cheaper to manufacture. However, there are other significant reasons for this transition:
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Cost of Production: As you mentioned, producing paper currency is generally cheaper than minting coins, especially when the latter is made from precious metals like gold or silver. Paper currency can be produced in larger quantities at a lower cost.
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Convenience: Paper currency is lighter and more portable than coins, making it easier for people to carry and use in everyday transactions. This convenience encourages trade and commerce.
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Facilitation of Large Transactions: For larger transactions, carrying large quantities of coins can be cumbersome. Paper currency allows for easier handling of substantial amounts, which can boost economic activity.
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Standardization: Paper currency can offer a standardized value that is not subject to the weight and purity variations that can occur with coins, providing a more consistent medium of exchange.
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Government Control: The issuance of paper currency can give governments more control over the economy, allowing them to adjust the money supply and manage inflation or deflation more effectively.
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Trust in the State: The use of paper currency typically relies on the trust and credit of the issuing state. As societies became more structured and advanced, they started to trust government-issued notes over physical commodities.
Overall, the transition to paper currency was a significant step in the evolution of monetary systems, reflecting changes in society, economy, and technology.
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