Question

Describe the token currency system in during the reign of tughlaq

Answer 1

tughlaq replaced those gold and silver coin and started the circulation of copper and brass coin as the token currency which has the same value as gold and silver in 1330-32 CE


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Answer 2

Tughlaq was a ruler who delighted in administrative experiments. When famine-like conditions and frequent revolts began straining his coffers, Tughlaq found it difficult to maintain the supply of gold (dinars) and silver (adlis) coins on a large scale. So, he introduced a token currency system and minted vast quantities of new copper and brass coins (tankas) that could be exchanged for fixed amounts of gold and silver.

While this decision helped the Sultanate’s finances initially, it also proved to be lucrative to forgers who began issuing a large number of fake coins. Loopholes like a simple design (the coins just had some inscriptions) and no royal seals made the task easier for forgers. Every house became a mint for copper coins while gold and silver coins were zealously hoarded. Soon, the market was awash with fake coins.

As good money was driven out of circulation, the token coins became practically valueless, leading to hyperinflation. Foreign traders also refused to accept them, paralysing trade. Realising that his scheme had failed, Tughlaq withdrew the currency in an attempt to stem the economic chaos.

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