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History of Money in Malaysia :  Early Money

Early Money in the Malay States

During the Han Dynasty (206 BC-221AD), the merchants of China and India discovered that the best alternative to the overland caravan trade route between East and West Asia was by way of the Isthmus of Kra, the narrow neck of land that separates the South China Sea from the Indian Ocean. The Chinese traders would land their goods in the region of Patani on the east Coast of the Isthmus of Kra, while the Indian merchants and later, the Arab from the Middle East, established their trading centres in the region of present day Kedah in the West Coast.

During this period, the local people used cowrie shells imported from the Maldive Islands or Borneo as currency for minor market purchases. For a long time, these shells were valued as amulets to ensure safe childbirth and as fertility charms. They could be strung together to facilitate easy transportation, or to form higher denominations when necessary.

From the eighth century onwards, merchants from China introduced copper cash in bulk into the Malay States and there formed the chief, and at times the sole, currency of the majority of the States of the Eastern Archipelago.

The first native coinage of the Malay States developed from this copper cash. Owing to the monsoons and the shortage of ships to carry out trading, the shortage of the copper cash led local chiefs and merchants to cast imitations of the cash for their own needs. In the east coast states, this copper cash in due course developed into a truly native coinage.