Who Invented Money?

The first minted coins were produced on the order of King Alyattes of Lydia, a kingdom located in and around modern-day Turkey. Around the same time, a relatively sophisticated system of currency also evolved in China.

Various forms of economy have existed since prehistoric times, when goods were bartered in exchange for other goods and services. Eventually, barter economies began to use cattle and other livestock as currency. Sometime around 1200 B.C.E., cowrie shells began to be used as money. Approximately 100 years earlier, at around 1100 B.C.E., small metal tokens resembling knives, spades and other weapons began to circulate in China. These eventually evolved to small circular shapes with a hole in the middle, which allowed them to be carried on a string. Thus, the first currency recognizable as coins originated in China.

However, the first minted system of currency came about in 600 B.C.E. King Alyattes of the Lydian kingdom oversaw the minting of coins made from electrum, which is a mixture of silver and gold. Much like modern money, they were stamped with various pictures to represent different denominations. This development is credited with helping Lydia become a dominating force in the region.

Around the same time as Lydia was minting coins, the Chinese replaced their coins with paper currency. Prior to that, around 118 A.D., they had begun to use squares of leather as money.