page_title: Society of the Mongol Empire
section_title: Marco Polo's observations
hierarchical_section_title: Society of the Mongol Empire / Trade routes / Marco Polo's observations
caption_attribution_description: Armenian Archibishop Jean, 1287 painting
context_section_description: One of the most impressive discoveries that Marco Polo made on his visit to Mongolia is how the empire's monetary system worked. He was not impressed by the silver Akçe that the empire used for a unified currency, or that some realms of the empire still used local currency, but he was most surprised by the fact that in some parts of the empire the people used paper currency.
  Marco Polo considered the use of paper currency in the Mongol Empire one of the marvels of the world. Paper currency wasn’t used in the entire empire. The Chinese silver ingot was accepted universally as currency throughout the empire, while local coins were also used in some western areas, such as the modern day Iran. Paper currency was used in China, continuing the practice established by the Chinese several hundred years before. The Chinese had mastered the technology of printmaking and therefore it was relatively simple for them to print bills. Paper currency was used in China since 960 A.D., when the Song dynasty started replacing their copper coinage with paper currency. When the Mongols invaded Song China they started issuing their own Mongolian bills in 1227. This first attempt by the Mongols did not last long because the notes issued expired after several years and were inconsistent throughout the parts of the Mongol Empire that issued them. In 1260, Kublai Khan created the Yuan Mongol's first unified paper currency with notes that did not have any expiration date. To validate the currency, it was made fully exchangeable to silver and gold and was accepted as tax payments. Currency distribution was small at first, but the war against the southern Song dramatically increased circulation. With the defeat of the Song, their currency was taken out of circulation and could be exchanged with Mongol currency at a relatively high exchange rate. Regardless of persistent inflation after 1272, paper currency backed by limited releases of coins remained as the standard means of currency until 1345. Around 1345, rebellions, economic crisis, and financial mismanagement of paper currency destroyed the public's confidence in the bills.
  To initiate the transition from other forms of compensation to paper currency the government made refusing to accept the bill punishable by death. To avoid devaluation, the penalty for forging or counterfeiting was also death.
caption: Archbishop John of Cilician Armenia, in a painting from 1287. His dress displays a Chinese dragon, an indication of the thriving exchanges with the Mongol Empire during the reign of Kublai Khan (1260-1294)
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