Chapter 516: The Popularization of Banknotes

Translator: Atlas Studios Editor: Atlas Studios

Zhang Zhang carefully observed Bai Wutong’s expression and talked about the advantages of implementing the circulation of banknotes. “If we replace copper coins and silver pieces with banknotes, everyone’s pockets won’t be so heavy when they go out for transactions. Every time they come to the bank to deposit money, there will be less manual labor involved. It’s also convenient for everyone to make transactions in private, and the banking industry can increase its efficiency.”

Bai Wutong suddenly smiled. “I think this plan is feasible, but you have to budget well. The amount of banknotes issued cannot cause inflation in the market. If there is inevitable inflation in the market, you need to react quickly enough and make timely market adjustments. At the same time, you have to ensure that fake currencies don’t appear. You have to increase the use of banknotes by the commoners and control the exchange rate of gold and silver prices.”

As the bank president, Zhang Zhang already had a lot of understanding of inflation and the market economy.

Bai Wutong’s proposal and request still surprised him.

The Great Empress’ knowledge was too impressive.

Zhang Zhang hurriedly said, “I accept the order.”

Zhang Zhang was only the bank president. The issuance of banknotes still had to go through a multi-sectoral consultation to formulate the amount of banknotes, the style of issuance, and other complicated work. After Sheng Huaixuan took a look at the proposal and the specific regulations, they would be handed over to Bai Wutong for review.

By the time the banknotes were implemented and circulated, it was already three months later.

When the commoners heard that copper coins and silver pieces were to be recycled, they were all very confused. Until the government announced the banknotes of different denominations in the entire Carefree Kingdom, they still found it unbelievable.

This was a very important matter. The issuance of currency meant a change in the way the transactions were conducted.

All the merchants were extremely concerned. They ran to the bank and asked, “If we don’t exchange the copper coins and gold on hand now, will we not be able to use them in the future and buy property in Carefree City?”

This question was the most urgent for everyone at the moment.

Li Nian held the instruction manual and explained to everyone in detail, “The issuance of banknotes is to make life more convenient for everyone. After a three-month exchange period, copper coins and silver pieces can no longer be used in circulation. However, gold is an exception. Even after the three-month exchange period, gold can still be exchanged for banknotes in the future. Gold will also become the only hard currency.”

“If you don’t want to exchange your money for banknotes, you can also exchange it for gold. However, gold has a high value and it’s very inconvenient to use. 1 suggest that everyone exchange it for banknotes and deposit it in the bank to increase interest.”

When everyone heard this, they asked again, “Then can’t the interest on gold increase?”

Li Nian explained, “As I said just now, gold will become a hard currency to exchange for banknotes. The exchange rate will adjust according to the changes in the market. This also means that gold itself will have a risk of lower value and there’s uncertainty. The bank can help store the gold, but they won’t give any interest.”

The commoners were confused but they understood the last sentence. If their money was exchanged for gold, there was no interest when depositing it in the bank.

They might as well not exchange for gold. In any case, banknotes could be used.

As for smart merchants, their eyes lit up. They could buy a large amount of gold and rely on the fluctuating price to generate profits.

It was like treating gold as property. When it rose, he would sell it and earn some profits. When it fell, he would buy another batch.

Continuously selling at high prices and buying at low prices might result in high returns.

It was simply a good deal.

When Meng Gui found out that the banknotes were being issued and the copper coins and silver had to be recycled, he quickly searched his house and gathered a large pile of copper coins and silver. He was afraid that there would be too many people in the bank. After the three-month deadline passed, the silver would no longer be worth money.

After learning that there was no interest even if it was exchanged for gold and deposited in the bank for hundreds of years, Meng Gui hesitated for a moment. He was afraid that if they were to merge with the Ling Kingdom in the future, the country might issue a policy that banknotes could not be exchanged for gold.

He divided all his assets into two. One half was used to exchange for gold, and the other half was used to earn interest in the bank.

Even the interest on half of his income was completely enough for him to repay the apartment loan.

When he had saved enough money in a few days and the stall was completely stabilized, he would buy another villa.

He withdrew the estimated small change for the next day and put it in his pocket. It was light and he was still in a daze.

Who would have thought that he would use banknotes one day?

Oh no, everyone would have to use banknotes one day.

A farmer from Qinghe Technical College saw the release of banknotes and decisively abandoned the use of money bag. She designed a wallet that could store the banknotes and asked the female workers to help sew it for the price of five coins. The next day, at the entrance of the bank, her business was booming and she earned a few taels of silver.

After enjoying the profits, she designed several different and novel wallets. They were long, short, zippered, and buttoned. She went straight to the clothing factory and customized a batch of goods. Everyone wanted to take good care of the brand new banknotes. After all, this thing was not like copper coins and silver pieces. It could be torn with teeth and lost after a little rubbing.

Apart from setting up her own stall to sell wallets, she also sent them to the stationery store, women’s supply store, and clothing store. She sold them to the shopkeeper at a low price and earned money easily.

In a few days, she had earned more money than she had ever thought possible in her life.

At the same time, seeing that the farmer was earning money, the other female workers also began to make wallets in private. There was also a small family clothing workshop that imitated her wallet and produced them in large quantities.

The farmer did not earn as much money as before, but she had already earned her first bucket of gold. She might as well take the high-quality route and use the money she earned to plan to open a wallet shop for herself.

She designed wallets with cartoon characters, leather, canvas, and shell decorations. She made full use of her professional standards and designed countless styles in one go. While she successfully opened up a new field, she also gained a foothold.

After the academy found out, they even let her give a speech as an outstanding student.

It caused a wave of entrepreneurship among the students.

Meng Gui had used half of his assets to buy gold. After hearing that the price of gold would fall, he had been paying attention to the price of gold. He was afraid that the price of gold would fall and he would lose half of his assets. He was constantly considering whether he should sell it before the price of gold fell and exchange it for banknotes to deposit in the bank for interest.

But soon, he was glad that he had spent half of his assets on gold.

Many rich families still felt that it was safe to exchange it for gold.

After all, this was the common currency used by the ancestors.

Therefore, as a result, more and more people bought gold. The production of gold did not increase. As the supply did not meet the demand, the price of gold increased.

If he sold his gold, Meng Gui would be able to earn 30% profits!

This was much easier than setting up a stall to earn money. It was also much more than the interest in the bank.

He was so excited that he wished he could exchange all his belongings for gold.

However, with the policies of the Imperial Court, the price of gold gradually stabilized. There were ups and downs, but the risk was still very high. Meng Gui thought that he did not have the ability to gamble, so he gave up on his idea to exchange for a large amount of gold.

After the three-month transition period, the commoners were completely used to the benefits of banknotes. The other areas of Carefree Kingdom also quickly popularized them..