Mongol Empire - Part 6: Paper Money and Passports: Mongol Innovations We Still Use Today

When you use a credit card, you’re relying on a concept the Mongols helped pioneer: money that doesn’t require physical precious metals. When you show a passport at a border, you’re using a system the Mongols formalized. When you receive mail, you benefit from postal principles the Mongols established.

The Mongol Empire didn’t just conquer territory. It created administrative systems so effective that their principles persist eight centuries later.

Here’s how nomadic warriors built institutions that shaped the modern world.

Paper Money: Trust Made Tangible

The Mongols didn’t invent paper money – the Song Dynasty of China did. But they implemented it on a continental scale in ways that transformed the concept.

The Problem with Metal Currency

Traditional currency (gold, silver, copper coins) had limitations:

• Heavy – Difficult to transport for large transactions
• Scarce – Mines couldn’t keep pace with economic growth
• Inconvenient – Counting coins was slow and error-prone
• Dangerous – Carrying wealth attracted thieves

The Chinese Innovation

The Song Dynasty (960-1279) issued paper notes backed by copper reserves:

• Called jiaozi (交子) initially
• Represented deposited coins
• Lighter and more convenient
• Limited regional acceptance

But the Song system was incomplete – notes circulated in limited areas with varying acceptance.

The Mongol Implementation

Kublai Khan’s Yuan Dynasty (1271-1368) created something new:

Universal Legal Tender

• Paper money (chao) was mandatory for all transactions
• Refusal to accept it was punishable
• Foreign merchants had to exchange metal for paper

Central Backing

• All notes issued by central government
• Theoretically backed by precious metals
• Standardized across the empire

Infrastructure

• Exchange offices in major cities
• Worn notes replaced without fee
• Counterfeiting punished by death

Marco Polo’s Amazement

Marco Polo devoted an entire chapter to Mongol paper money, describing it with wonder:

“The Grand Khan causes the bark of trees to be stripped off, and from it to be made something resembling paper, but black. When these papers are made, he has them cut into pieces of money of different sizes… And the Khan causes every year to be made such a vast quantity that it must equal in amount all the treasure in the world.”

For a Venetian accustomed to gold and silver, the concept was revolutionary.

Lessons and Failures

The system worked initially but eventually failed through overissuance:

• Later Khan’s printed money to cover deficits
• Inflation destroyed value
• By the Ming Dynasty, paper money was abandoned

But the concept persisted. Modern fiat currency operates on the same principle: trust in the issuer replaces precious metal backing.

The Paiza: First Passport System

The paiza (also called gerege) was a metal or wooden tablet issued by the Khan granting specific privileges. It functioned as the world’s first systematic passport.

Design

Paiza came in different materials indicating rank:

• Gold – Highest officials, princes, senior commanders
• Silver – Important officials, commanders
• Bronze/Copper – Lower officials, important merchants
• Wood – Ordinary travelers with imperial permission

Each paiza was inscribed with:

• Identification of the holder
• Rights granted (passage, lodging, horses, supplies)
• Authority of the Khan

Function

A paiza holder could:

• Travel freely throughout the empire
• Demand fresh horses from Yam stations
• Require food and lodging from local authorities
• Pass through checkpoints without delay
• Invoke imperial protection

The Guarantee

The inscription typically read something like:

“By the power of Eternal Heaven, by the grace of the Great Khan. He who does not show respect shall be guilty.”

Interfering with a paiza holder meant death.

The Passport Parallel

Modern passports function identically:

• Identify the holder
• Grant specific travel rights
• Invoke government protection
• Enable passage through borders

The conceptual framework of documented identity enabling travel across jurisdictions began with the paiza.

The Yam: Ancestor of Postal Systems

We’ve discussed the Yam as a military communication system. But it also became the model for civilian postal services.

The System

The Yam network included:

• Relay stations every 25-50 km
• Fresh horses always available
• Riders dedicated to message carrying
• Supplies for travelers
• Infrastructure maintained by imperial mandate

The Civilian Application

The Yam eventually served:

• Official correspondence (original purpose)
• Commercial communications
• Private letters (with appropriate fees/permissions)
• Package delivery

The Principles That Persisted

Modern postal systems use the same concepts:

• Relay infrastructure – Sorting centers and delivery routes
• Standardized service – Consistent expectations everywhere
• Government backing – State guarantee of delivery
• Universal access – Available throughout the territory

The Yam was faster than any European postal system for centuries.

Diplomatic Immunity: Ambassadors Untouchable

The Mongols took diplomatic immunity seriously – more seriously than any previous empire.

The Principle

Ambassadors were sacrosanct:

• Could not be harmed under any circumstances
• Their messages delivered regardless of content
• Their persons protected even when bearing hostile declarations
• Violations punished with war

The Rationale

The Mongols depended on diplomatic communication for:

• Intelligence gathering
• Surrender demands
• Negotiation
• Commercial agreements

Killing ambassadors broke the system everyone needed.

The Enforcement

When Khwarezmian Shah Muhammad II killed Mongol ambassadors (1218):

• Genghis Khan declared total war
• The Khwarezmian Empire was destroyed
• The message was unmistakable: ambassadors are inviolable

Modern International Law

The principle persists:

• The Vienna Convention on Diplomatic Relations (1961) codifies diplomatic immunity
• Ambassadors cannot be arrested or detained
• Diplomatic premises are inviolable
• The concept traces through Islamic, Roman, and Mongol traditions

Census and Taxation: Data-Driven Governance

The Mongols implemented systematic data collection unprecedented for their era:

The Census

Upon conquering a territory, Mongols conducted:

• Household counts
• Population enumeration
• Asset assessment
• Skill inventories (craftsmen, warriors, etc.)

This data enabled:

• Accurate taxation
• Military conscription quotas
• Resource allocation
• Administrative planning

Taxation Innovation

Rather than arbitrary extraction, Mongol taxation was:

• Proportional – Based on assessed capacity
• Predictable – Known rates and schedules
• Systematic – Applied consistently
• Documented – Records maintained

The Darugachi System

Mongol administrators (darugachi) in conquered territories:

• Maintained census records
• Collected taxes
• Reported to central authority
• Enforced imperial law

This was professional administration, not feudal extraction.

Religious Tolerance: Freedom Before Its Time

While not an “innovation” in the technological sense, Mongol religious policy was remarkably modern:

The Policy

• No official religion of the empire
• All faiths protected
• Religious leaders exempted from taxes
• Persecution forbidden

The Practice

The Mongol court included:

• Shamanist traditionalists
• Buddhist monks
• Nestorian Christians
• Muslim scholars
• Taoist priests
• Confucian advisors

All served simultaneously without conflict.

The Rationale

Pragmatic rather than philosophical:

• Religious conflict was economically destructive
• Tolerant rulers faced less resistance
• Diverse expertise was valuable
• The Mongols didn’t care what you believed – only what you produced

Modern Parallel

The principle of state religious neutrality – separating governmental authority from religious identity – anticipates post-Enlightenment concepts by centuries.

Standardization: The Key to Scale

Perhaps the most important Mongol innovation was the commitment to standardization:

Standardized Across:

• Military organization (decimal system)
• Legal code (the Yasa)
• Currency (paper money)
• Documentation (paiza system)
• Communication (Yam protocols)
• Administration (darugachi procedures)

Why Standardization Matters

Standardization enables:

• Scale – Systems work the same everywhere
• Efficiency – Less time spent adapting to local variation
• Training – Personnel can move across regions
• Control – Central authority can monitor effectively
• Trust – Participants know what to expect

The Modern Parallel

Modern organizations obsess over standards:

• ISO certifications
• Industry protocols
• Legal frameworks
• Technical standards

The Mongols understood standardization as a force multiplier seven centuries ago.

The Innovation Paradox

The Mongols didn’t invent most of their innovations – they adopted and scaled them:

The Mongol Genius

The innovation was in implementation:

• Taking good ideas and scaling them
• Forcing adoption through imperial power
• Maintaining systems across vast distances
• Integrating disparate elements into coherent administration

This is often more valuable than invention. Ideas are cheap; execution is expensive.

Why Nomads Built Better Systems

Counter-intuitively, the Mongols’ nomadic background helped them build effective administrative systems:

No Legacy to Protect

Unlike established empires, Mongols had no:

• Existing bureaucracy to preserve
• Traditions to defend
• Constituencies to placate

They could adopt the best ideas from everywhere.

Practical Orientation

Nomadic life required:

• Efficient resource use
• Quick decision-making
• Results over process
• Adaptation over tradition

These values transferred to administration.

Synthesis Capability

Ruling diverse populations meant:

• Exposure to many systems
• Ability to compare
• Selection of best practices
• Integration into coherent whole

The Mongols were empire-scale integrators.

Conclusion: The Administrative Empire

The Mongol Empire’s military conquests are famous. Its administrative innovations are underappreciated.

In the course of building history’s largest contiguous land empire, the Mongols created or scaled:

• Paper money as universal currency
• Passport systems for documented travel
• Postal networks spanning continents
• Diplomatic immunity as international law
• Systematic taxation based on census data
• Religious tolerance as governance principle

These weren’t peripheral features. They were essential to governing 24 million square kilometers with a relatively small Mongol population.

The military conquests ended. The administrative principles endured.

When you check your bank app, cross a border with your passport, or receive mail at your door – you’re using systems whose architecture traces back to a 13th-century empire of nomadic warriors.

The Mongols’ greatest conquest may not have been territory. It may have been administrative modernity.

This post is part of the Mongol Empire series, exploring the military, economic, and organizational innovations that built history’s largest contiguous empire.

Previous: Pax Mongolica – How conquest created the first global economy

Next: The Silk Road Explosion – Trade routes under Mongol protection