Why did the experiment of token currency of Muhammad bin Tughlaq fail?

Answer 1

Being badly in need of money, he tried a novel experiment. This was the introduction of token (copper) currency. He ordered that the copper coins should be considered equal in value to the gold and silver ones. This experiment also failed because every goldsmith started minting fake coins at home. People started paying their taxes in these coins. Foreign traders refused to accept these fake coins and as a result, there was a huge loss of revenue. He then announced that all the copper coins could be exchanged with the gold and silver coins. The people came out with their copper coins and took away the gold and silver ones. This resulted in a great loss to the government.

Answer 2

Muhammad bin Tughluq noticed foreign empires using coins. Muhammad decided to use the same policy himself. He memorialized himself and his activities through his coinage and produced more gold coins than had his predecessors. The coins boasted fine calligraphy. He issued a number of fractional denominations. These coins were called "tanka".

The large influx of gold from his plundering of south Indian campaign led him to increase coinage weights. He enlarged the gold dinar from 172 grains to 202 grains. He introduced a silver coin, theadlis, which was discontinued after seven years due to lack of popularity and acceptance among his subjects.

All his coins reflect a staunch religiosity, with such inscriptions as "The warrior in the cause of God", "The trustier in support of the four Khalifs - Abu Bakr, Umar, Usman and Ali". The kalimahappeared in most of his coinage. Both at Delhi and at Daulatabad coins were minted in memory of his late father. There were also mints at Lakhnauti, Salgaun, Darul-I-Islam, Sultanpur(Warrangal), Tughlaqpur (Tirhut), and Mulk-I-Tilang. More than thirty varieties of bullion coins are known so far, and the types show his numismatic interests.

Unique among his coinage was the "forced" token currency. It was modeled after the Chinese example,that is using brass or copper tokens, backed by the silver and gold kept in the treasury. Tughluq had two scalable versions, issued in Delhi and Daulatabad. The currency was issued in the two different standards, undoubtedly to follow the local standards which preexisted in the North and in the South respectively. He engraved "He who obeys the Sultan obeys the compassionate" to fascinate people in accepting the new coinage. However, very few people exchanged their gold or silver coins for the new copper ones. Moreover, the tokens were easy to forge, which led to heavy losses, as Tughluq subsequently withdrew the forged currency by exchanging it for bullion coins. This drained the treasury because he had to compensate the losers. But it is said that after the plan failed, there were heaps of copper coins lying around the royal offices for years.