The Khaljis and the Tughlaqs — Question 8

Muhammad bin Tughlaq introduced the token currency to overcome the shortage of silver. He introduced a bronze coin having the same value as the silver tanka. This scheme would have succeeded had Muhammad bin Tughlaq taken care to see that only the government was issuing the token currency. But that did not happen and every household turned into a mint. As a result, gold and silver coins disappeared from the market and their place was taken by bronze coins. People began to pay their taxes in token currency and trade suffered. Finally, Muhammad bin Tughlaq decided to withdraw the token currency and promised to exchange silver pieces for bronze coins. This caused a great loss of wealth to the royal treasury.