Who Created Money? A Historical Overview with Special Focus on Nepalese Currency

Money shapes the world we live in. Every day, millions of Nepalis use money for buying food, paying bills, or saving for the future. But have you ever paused to wonder — who actually created money? How did money come into existence, and what is the story behind Nepal’s currency, the Nepalese Rupee? In this detailed guide, we will explore the fascinating history of money from its global origins to the unique journey of Nepalese currency. We will also discuss how money has evolved into the digital forms many Nepalis use today.

Understanding Money: What Is It and Why Was It Created?

At its core, money is a tool that simplifies trade. Before money existed, humans relied on barter systems, exchanging goods directly — for example, trading rice for a goat. However, barter has serious limitations:

• Double coincidence of wants: Both parties must want what the other offers at the same time.
• Lack of divisibility: Some goods cannot be divided into smaller units to match trade values.
• Difficulty in storing value: Perishable goods can spoil and lose worth.
• Measurement problem: No common standard to measure value or price.

These challenges led to the invention of money — a universally accepted medium of exchange, a store of value, and a unit of account. Money solves the problem by acting as a common measure and easy-to-carry asset for trade.

The Global Origin of Money

Historians believe that the earliest forms of money were commodities with intrinsic value, like cattle, grain, or shells. Over time, precious metals became the preferred money due to their durability and portability.

The first known coins were minted in Lydia (modern-day Turkey) around 600 BCE. These coins were made of electrum — a natural alloy of gold and silver — and stamped with official marks to guarantee authenticity. The idea quickly spread worldwide, and by 500 BCE, many civilizations, including Greece, China, and India, used coins for trade.

Paper money, on the other hand, appeared much later in China around the 7th century AD and took centuries to reach widespread use in Europe and Asia.

Money in Ancient Nepal

Like many ancient societies, early Nepal primarily relied on barter, especially in rural and mountainous regions. Traders and farmers exchanged goods like salt, grains, wool, and livestock to meet their needs.

During the Licchavi period (approximately 400 to 750 AD), Nepal began minting primitive coins. These were mostly silver or copper pieces with religious symbols or images of rulers. These coins were not standardized in weight or size but helped facilitate local trade.

The Malla period (12th to 18th centuries) saw a flourishing of trade and culture in the Kathmandu Valley. The Newar merchants of this time minted their own coins to facilitate commerce between Nepal, Tibet, and India. Coins bore inscriptions in Nepal Bhasa and Sanskrit, often featuring images of deities or kings.

The Birth of the Nepalese Rupee

Before the 20th century, Nepal’s economy used a mix of local coins and foreign currencies, particularly the Indian Rupee due to trade and geographic proximity.

In 1932, Nepal officially introduced the Nepalese Rupee (NPR) as the country’s national currency under the Rana regime. This was a significant step towards modernizing Nepal’s economy and asserting monetary sovereignty.

The first Nepalese Rupee coins were made primarily of silver and copper and featured portraits of the ruling monarch along with inscriptions in Nepali script. Banknotes soon followed, featuring images like Mount Everest, the national emblem, and historic figures, which instilled pride and identity among the Nepali people.

The Nepalese Rupee was initially pegged to the Indian Rupee, maintaining parity to stabilize trade between the two countries.

Role of Nepal Rastra Bank in Currency Management

The Nepal Rastra Bank (NRB) was established in 1956 as Nepal’s central bank, tasked with issuing currency and regulating the banking system. It acts as the custodian of Nepal’s monetary policy and financial stability.

NRB plays a vital role in:

• Issuing Nepalese currency notes and coins.
• Controlling inflation and interest rates.
• Supervising commercial banks and financial institutions.
• Promoting financial inclusion and digital payment systems.

Over the decades, NRB has introduced multiple series of banknotes, improving security features to combat counterfeiting and adapting to new economic challenges.

Evolution of Nepalese Currency Design and Security

Since its introduction, Nepalese currency has undergone several changes in design and material.

Banknotes

Early banknotes featured images of monarchs and important cultural symbols such as:

• Mount Everest — symbolizing Nepal’s pride as the “Roof of the World.”
• National Emblem — representing unity and sovereignty.
• Wildlife — highlighting Nepal’s rich biodiversity.

Recent banknotes include advanced security features such as watermarks, holograms, and microprinting to protect against fraud.

Coins

Coins have changed from primarily silver and copper to include nickel and other alloys to improve durability and reduce production costs. Circulation coins include denominations from 1 paisa up to 10 rupees, though smaller denominations are rarely used today.

Modern Money in Nepal: Digital Payments and E-Wallets

The traditional cash economy in Nepal is rapidly changing with the rise of digital payments.

Popular mobile wallets and payment apps include:

• eSewa: Nepal’s first and largest digital wallet, allowing users to pay bills, recharge mobiles, send money, and shop online.
• Khalti: Another popular wallet offering seamless payments and money transfers.
• IME Pay: Widely used for money transfer and payment services.

These platforms are not only convenient for urban users but also help extend financial services to rural communities where traditional banking is limited.

The government and Nepal Rastra Bank actively promote these digital solutions to increase financial inclusion, reduce cash dependency, and modernize Nepal’s economy.

Expert Opinions on Nepalese Currency and Economy

“The Nepalese Rupee has demonstrated stability despite various economic challenges, thanks to sound monetary policies by Nepal Rastra Bank,” says Dr. Suresh Sharma, economist at Tribhuvan University.

“Digital wallets are transforming how Nepalis handle money, providing convenience and security, especially during the COVID-19 pandemic,” remarks Ms. Anju Gurung, monetary policy analyst.

Comparing Nepalese Rupee with Regional Currencies

The Nepalese Rupee is pegged to the Indian Rupee, which remains its closest trading partner. This peg helps maintain stability in exchange rates and supports cross-border trade.

However, Nepal faces challenges in balancing currency stability with inflation control and economic growth. Trade deficits and remittance inflows heavily influence Nepal’s currency market.

Future of Money in Nepal

As Nepal advances, the future of money looks promising and digital.

Key trends to watch include:

• Increased adoption of digital currencies and blockchain technology.
• Government initiatives to enhance financial literacy and digital infrastructure.
• Expansion of mobile banking to remote areas.
• Potential introduction of Central Bank Digital Currency (CBDC) in the future.

Summary

Money’s creation was a revolutionary step in human civilization, solving many challenges of barter trade. Nepal’s currency history is rich — from primitive coins in the Licchavi era to the modern Nepalese Rupee regulated by Nepal Rastra Bank.

Today, money in Nepal is not just physical cash but digital payments and e-wallets that connect millions. Understanding this journey helps us appreciate the value of money beyond numbers, reminding us how it shapes livelihoods and economies.

References

• Nepal Rastra Bank Official Website
• Wikipedia - Nepalese Rupee
• eSewa Digital Wallet
• Article on Digital Payments in Nepal

Try These Insights and Share Your Experience!

Now that you know the story behind money and Nepal’s currency, how has digital payment changed your financial life? Do you prefer cash or e-wallets? Share your thoughts and experiences in the comments below — your story can help others!