[Solved] Why MBT's Token Currency Failed | Tughluq Economy

Consider the following statements:
Assertion (A): The scheme of the token currency of Muhammad Tughluq proved unsuccessful.
Reason (R): Muhammad Tughluq did not have the proper control over currency issue.
Choose the correct answer from the codes given below:

[U.P.P.C.S. Pre 2006]

Detailed Solution & Historical Context

Concept

Muhammad Bin Tughluq's token currency experiment (1329-30) was an attempt to manage a silver shortage by using brass and copper as legal tender. Its failure is a classic case study in pre-modern monetary policy.

Authentic Source Evidence

Contemporary historian Barani famously noted that 'the house of every Hindu became a mint'. The state failed to create complex designs or a monopoly on the minting process, allowing for mass counterfeiting.

Analytical Breakdown

Logic 1: Assertion (A) is true. The scheme collapsed by 1333, and the Sultan had to pay back gold/silver coins in exchange for the useless copper tokens.

Logic 2: Reason (R) is true and explains (A). Because the Sultanate lacked the technology to prevent forgery, and the Sultan didn't enforce a strict centralized minting monopoly, the market was flooded with fake coins, causing hyperinflation.

Conceptual Deep Dive & Logic

"Which global examples influenced MBT's token currency idea?"

He was likely influenced by the 'Chao' paper currency of Kublai Khan in China and the failed 'Kao' system in Ilkhanid Iran.

Examiner's Mindset & Pro-Tip

"The experiment failed not because the concept was wrong, but because the administration lacked the security infrastructure to verify the legitimacy of the tokens."

Topic Clusters (click to see related topic questions)

Barani 2

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Consider the following statements:Assertion (A): The scheme of the token currency of Muhammad Tughluq proved unsuccessful.Reason (R): Muhammad Tughluq did not have the proper control over currency issue.Choose the correct answer from the codes given below: