The first coins were issued in Lydia in present-day Turkey in the late seventh century BC. These coins were made of electrum, an alloy of gold and silver, and were basically blobs of metal punchmarked on one side. The Lydian king Croesus (c. 560-547 BC) is said to have issued the first coins of pure gold or silver, though many believe these coins were issued after the Persian conquest of Lydia in 547. Coins soon spread throughout the Persian Empire. When Alexander the Great (336-323 BC) conquered the Persian Empire, his gold and silver coins were produced throughout the Persian Empire both by him and his Hellinistic successors.
As Seleucid power waned, the Attalid kings began issuing their own coins as did other minor kingdoms and cities. Although the Romans conquered Turkey in the first century BC, they allowed Greek silver issues to continue. Roman and Greek coins circulated in the west while Parthian and Sasanian coins circulated in the east. Regular minting of Roman coins began in the second century.
After Byzantium succeeded Rome, its coins circulated in Turkey until 1453. The Byzantine coinage was based on the gold solidus or nomisma. Silver coinage was less important, though silver sliquae and milarenses circulated with 1 solidus = 12 milarenses = 24 siliquae. ANastasius I (491-518) reformed the currency, introducing large copper nummi with 1 follis equal to 40 nummi. Initially there was 180 foles to the solidus, but by the ninth century it took 288 folles to get one solidus. Alexius I Comnenus (1081-1108) reformed Byzantine coinage introducing the gold hyperperon, equal to 3 electrum asperon trachy or 48 base-silver asperon trachy.
Constantinople was captured during the Fourth Crusade of 1204 and the Byzantines set up an empire in exile with its capital at Nicaea in northwestern Turkey. In 1261 Michael VIII Palaeologus of Nicaea, recaptured Constantinople and his dynasty ruled it until the fall of Constantinople in 1453. Andronicus II (1282-1328) introduced a new silver coin, the basilikon, based on the Venetian grosso. After 1350, no gold coins were produced and the solidus was replaced by the stavraton equal to half a hyperperon.
Initially, Islam failed to make any deep incursions into Turkey, but the Seljuk Turks conquered most of Anatolia following the Battle of Mantzikert in 1071. The Turks issued copper coins in imitation of Byzantine coins. Coins were also issued by the Crusaders in the twelfth and thirteenth centuries, by Cilician Armenia between 11878 and 1271, by the Seljuqs of Rum in the thirteenth century, by the Artuqids in Diyabakr (1098-1232) by the Zengids in northern Iraq (1127-1222) and by the Ayyubids of Syria in the late twelfth and early thirteenth centuries.
The Mongol invasions weakened the Seljuqs and forced the Ottomans west, eventually leading to the fall of Byzantium. The Seljuk Sultanate disintegrated; in the 14th century the Ottoman State emerged, and soon expanded by the means of conquest. The Ottomans and the Qarmanids (1256-1483) based their early coins on Ilkhanid issues.
In 1453 the Ottoman Turks conquered Constantinople and turned it into Istanbul, the capital of their Ottoman Empire. At its height in the late 1500s, the Ottoman Empire included most of the Balkans, a large portion of Hungary in central Europe, and most of the Middle East and North Africa. After the reign of Sultan Suleyman I the Magnificent (1494-1566), the Ottoman Empire began to decline. After World War I, the new Turkish government ruled in Anatolia (Asian Turkey) between 1920 and 1922 under Mustafa Kemal while the Ottoman ruler maintained a small territory around Constantinople. After the collapse of the Ottoman Empire in 1922, the Turkish state was founded on November 1, 1922, and became a republic on October 29, 1923.
The Piastre (XOTP) was the main currency in the Ottoman Empire until 1881. The Ottoman Lira (Livre, Pound) was divisible into 100 Piastres (Gurush) or 4000 Paras. There were numerous other subdivisions for smaller coins, and different monetary systems existed in different parts of the Ottoman Empire. The different countries that were part of the Ottoman Empire should be consulted for local variations on the Ottoman monetary system.
Between 1839 and 1920, the government and the Ottoman Bank periodically issued banknotes. The government issued banknotes during the Serbo-Turkish war (1876-1878) and World War I, creating inflation. Between August 28, 1876 and March 12, 1880 the Paper Lira depreciated by almost 90%. The Banque Ottoman Imperiale had a monopoly right of issue beginning on June 3, 1863. The Ottoman Empire adopted the gold standard on January 6, 1881 and created the decimalized Ottoman Empire Gold Lira (XOTG) with 1 Lira divisible into 100 Piastres or 4000 Paras. Officially, all foreign coins were banned in 1883 (Ottoman Empire, circular of 25 January 1883), though they were later accepted in the far African and Asian reaches of the Ottoman Empire.
Turkey went off the gold standard on August 3, 1914 and began issuing Paper Liras or Evrak-? Nakdiye (XOTP), which were theoretically backed by German Treasury Notes, but the paper Lira steadily depreciated against the gold Lira. Government notes depreciated to 5.51 paper Ottoman pounds per gold Ottoman pound in November 1917. In 1920, government notes had depreciated to about 6.80 Turkish paper liras per gold lira; Ottoman Bank notes had depreciated to about 3 paper liras per gold lira. These continued to circulate until 1927. The Turkish Lira replaced the Ottoman Empire Paper Lira in 1926.
Banknotes were issued by the Treasury of the Ottoman Empire from 1840 until 1878, by the Imperial Ottoman Bank from 1863 until 1918, by the Ministry of Finance from 1926 until 1931, and by the Central Bank of Turkey beginning in October 1931. The central bank opened in Istanbul on December 26, 1931 and took over note issue from the Ottoman Bank on March 1, 1935, upon the expiration of Ottoman Bank's concession under the 1925 law. The Ottoman Bank became an ordinary commercial bank, though its notes continued to circulate until March 31, 1948.
On January 1, 2005, Turkey replaced the old Lira with a New Lira equal to 1,000,000 old Lira.