The Fifth Lesson from Monetary History: Learning from the Currency Wars of Manchukuo in the Age of Cryptocurrencies

Key Points of This Article

1. The Proliferation of Cryptocurrencies and Manchukuo's History
The current proliferation of over 37 million types of cryptocurrencies mirrors the currency wars in Manchukuo, where 136 types of paper money once vied for supremacy. Excessive currency confusion leads to economic turmoil, and historically, an overabundance of currencies has paralyzed markets.

2. Political Maneuvering and Currency Annihilation
In Manchukuo, various forces, including Japan, the Kuomintang, and the Communist Party, engaged in currency manipulation and unification battles. However, due to deteriorating resource procurement and rampant inflation, currencies lacking political and economic trust were annihilated, replaced by a new unified currency.

3. The Essence of Trust Surviving Through Selection
In the modern era, a quiet selection process is already underway for some cryptocurrency brands. The competition among cryptocurrencies hinges not only on technological aspects but also on how much social trust they can garner. As history proves, only currencies that gain unwavering trust ultimately survive.

Currently, cryptocurrencies have expanded to 37 million types. What fate awaits currencies that are over-selected? The history of Manchukuo, where a currency war without gunfire unfolded, teaches us that only those who gain 'trust' survive.

This Issue's Currency: 'Manchukuo Central Bank 1 Yen Note (Type B 1 Yen Note)'

Few people are aware of how many cryptocurrency brands exist worldwide. According to the price tracking site CoinMarketCap, there are over 37 million cryptocurrencies globally. Of these, 17,000 to 18,000 have actual trading activity, with around 200 being actively traded. An excessive range of choices can lead to unnecessary confusion, especially in currency. This time, we introduce an example of conflicts caused by the variety of currencies. The stage is set in Northeast China in 1932, in the now-defunct Japanese puppet state of Manchukuo.

Originally, Manchuria was not part of Chinese civilization, but it came to be regarded as part of China after the Jurchen people of this region established the Qing dynasty and unified China. In 1860, with the signing of the Treaty of Beijing, Inner Manchuria was ceded from the Qing to the Russian Empire, and Outer Manchuria became a leased territory of the same empire.

In February 1891, Russia officially decided to construct the Trans-Siberian Railway, and by 1903, a railway was laid in the Eastern Three Provinces, which would later become Manchuria. The Russian Empire directly operated this railway. The railway, capable of transporting large quantities of goods and troops from Moscow to the Far East, was seen as a threat by Japan, which wanted to use the Korean Peninsula as a military buffer zone at the time.

In 1904, the Russo-Japanese War broke out, and Japan emerged victorious. Japan demanded the transfer of the railway line south of Changchun in addition to reparations, aiming to ease military pressure. This later became the South Manchuria Railway (Mantetsu), a major conglomerate that not only managed railways but also developed coal mines around stations, supporting the economy of the Eastern Three Provinces area.