The Yuan Dynasty was the most prosperous period of ancient paper money in China. For most of the Yuan Dynasty, paper money was the only officially recognized currency, completely replacing the status of copper coins in circulation, which is still a brand-new thing in the history of China. But it was also in the Yuan Dynasty that the banknote law began to deteriorate gradually.

The rulers took away the hard currency that maintained the credit of paper money, making it impossible for folk paper money to be converted into virtual paper money without capital. More seriously, the indiscriminate issuance of paper money has become a common means for the government to deal with the financial crisis, and the burden has been passed on to the people. As a result, inflation began to intensify. Banknote officials at all levels also took the opportunity to resell gold and silver, demanding from the people who were confused about changing banknotes, which led to the increasingly low use of banknotes, the sharp drop in value and the high price, and the people complained. In order to save China's devalued paper money, the imperial court (Yuan Dynasty) promulgated the "Regulations on Paper Money Law", reaffirming that the government fixed the price of silver and paper money, prohibited the reselling of gold and silver, and required industrial ink. However, because the fundamental problem of reserve and circulation has not been solved, in fact, this law trying to save paper money is completely ineffective.

At the beginning of Mingxing, the old system of the previous generation was still used, and Daming paper money was issued. Money always allowed a thousand pieces of silver; The gold and silver of banknotes are accurate, and a banknote warehouse has been set up to replace the damaged banknotes. In the early Ming Dynasty, both money and banknotes were used. The money made in this dynasty was the same as the old money made in the previous generation, but there was no reserve for issuing banknotes. Without the exchange system of precious metals, paper money will inevitably become worthless. Once the circulation of paper money is too large, it will easily lead to chaos in the circulation market and make people lose trust in paper money. The combination of old and new money will inevitably lead to the disadvantages of privately casting bad money for profit. Historical development has proved that these two phenomena will appear soon.

In the twenty-seventh year of Hongwu (1394), in order to reverse the trend that people valued money over paper money because of the devaluation of paper money, the Ming government issued a ban on changing copper coins into paper money, and restricted the people to change all copper coins into paper money within half a month. However, this order had little effect and had to be banned several times in the 30th year of Hongwu, 6th year of Yongle (1408), 1st year of Xuande (1426) and 13th year of Orthodox (148). However, the corruption of the banknote law was irreversible, and finally the court officially banned silver and recognized it.

The withdrawal of ancient paper money from the historical stage in China is due to many deep-seated factors besides the direct cause of the loss of credibility caused by official spamming.

First of all, the massive inflow of silver made up for the shortage of currency circulation since the Tang Dynasty and rebuilt the economic foundation of China.

Second, the society tends to be closed and conservative, the economic activity declines, and the demand for currency circulation decreases.