Genghis Khan and the Making of the Modern World

by Jack Weatherford

In a commercial world not yet accustomed to dealing with paper currency, Mongke grasped the importance of sustaining faith and purity in the monetary system. Genghis Khan had authorized the use of paper money backed by precious metals and silk shortly before his death in 1227. The practice grew erratically in the coming years, but by the time of Mongke Khan’s reign, it became necessary to limit the paper money supply in ways that it was not necessary to do with gold and silver coins. Mongke recognized the dangers incurred by earlier administrations that issued paper money and debt on an ad hoc basis, and in 1253 he created a Department of Monetary Affairs to control and standardize the issuance of paper money. The superintendent of the agency centralized control to prevent the overissue of paper money and the erosion of its value through inflation.