This chapter deals with cash (banknotes and coins), the oldest and most traditional form of money in existence. Cash involves a paradox: On the one hand, it is technologically less advanced that modern means of payments like cards and apps, so one could presume that it should decline in use and eventually disappear. On the other, however, evidence for almost the whole world shows that the demand for cash is increasing, although it is used less frequently for certain types of transactions like online commerce, retail stores, and restaurants. Criminal activities may explain part of the puzzle, but not much. One advantage of cash is that it can be seen and touched, therefore appealing to the senses and conveying a sense of security. Another is that it ensures absolute privacy of transactions. Other important characteristics explaining the popularity of cash are that it is simple (it requires no technology or complication whatsoever); definitive (it instantly settles any financial obligation); private and personal (it appeals to the desire of confidentiality); and self-sufficient (it does not depend on any other infrastructure functioning). We conclude therefore that physical cash is a useful complement of a robust and diversified monetary system, in which digital means of payments gradually prevail.

An understanding of how the money market developed is vital because money serves as the blood of an economy. From 1800 to 1937, the Chinese money market transitioned from a highly fragmented bimetallic system to a gradually integrated silver yuan system in tandem with a silver-backed fiduciary paper-money system until a fiat money system was established. As a consequence, the economy became increasingly monetized as the growth rate of the money supply gradually surpassed the overall economic growth rate without evident inflation pressure on general price trends. This development resulted both from the efforts of governments and private institutions in response to various types of shock separately and from the outcomes of competition and co-operation between the two stakeholders over time.

This chapter explains how the Meiji Restoration embodied two profound contradictions. The new government described its actions and policies both as a “revival of ancient kingly rule” (ōsei fukko), but also as a revolution (isshin). These phrases were in nominally in opposition: fukko referred explicitly to the ancient past, while isshin declared on the contrary, that all was being made new. That contrast reveals how Meiji leaders embraced radical reform, but connected it to the renewal of ancient ways. While describing reform as ancient, the government also reconciled a celebration of Japanese uniqueness with the adoption of Western ideas and technologies. Government discourse therefore contained the dual tensions of “new vs. ancient” and “foreign vs. uniquely Japanese.” As this chapter reveals, these tensions are most evident in the iconography of Japanese banknotes, where the government sought to craft a national history that was both distinctly Japanese and analogous to Western models. The banknotes were thus simultaneously an emulation of the West and a celebration of ancient Japanese legends.