From Camel Silver Coins to On-chain Tokens, Cryptocurrency Passes Through the Silk Road

Author: Liu Honglin

This week, I drove along the Hexi Corridor from Wuwei, Zhangye, Jiuquan to Dunhuang, and passed through Fengshakou at the foot of the Qilian Mountains. I realized that the "Silk Road" is not a romantic word, but a sky full of wind and sand, continuous post stations and millennium camel bells. When I stood by the Han Great Wall and watched the sunset, a thought came to my mind: could something invisible and intangible like virtual currency have anything to do with this trade route that once supported Eurasian civilization?

If you think about it carefully, it’s quite interesting.

The Silk Road is essentially a channel of trust and payment. On the thousands of miles of trade route, a merchant could go out of Chang'an and do business with countries along the way with a Han Dynasty post seal and a few rolls of silk; and in today's Web3 world, an Ethereum address can complete the transfer of value across borders. In the past, silk was currency; today's tokens are digital silk. Only the carrier has changed, but the logic has not changed: they are all for bypassing geographical and power boundaries to achieve transactions, consensus and trust.

From Camel Silver Coin to On-chain Token: A Crossover between Payment and Trust

Today we stood at the foot of Jiayuguan and took photos, thinking that this is the end of the Great Wall. But in the Tang Dynasty, it was the starting point for Central Asian caravans to enter China. This road opened by Zhang Qian during his mission to the Western Regions later supported the "barter" and "silk diplomacy" of the entire Han and Tang dynasties. Every transaction on the Silk Road must solve a fundamental problem: what do you use as "money"?

In an era when the monetary system was not unified, the essence of currency was a credit certificate. Merchants departing from Zhangye might use Han Wuzhu coins, but when they arrived in Samarkand, silver coins, gold, and even camels themselves could become the medium of exchange. What really made the transaction flow was the cross-language and cross-cultural "payment negotiation" and the trust in each other's identity. The circulation of currency is actually based on a very primitive but efficient "decentralized" consensus system.

In fact, "silk" itself was not just a commodity in ancient times, it was also a form of currency.

As early as the Han Dynasty, the imperial court had clearly stated that silk was used as the salary for the army and border officials. The "Book of Han: Food and Goods" states: "Rewards and salaries are all made of silk, and silk can be used as a token of currency." In other words, in some cases, silk is not just a "commodity" for trading, but also an "official payment tool" that can directly replace copper coins, gold and silver.

Especially in frontier areas, wartime or periods of metal currency shortage, silk, as a lightweight, durable and high-value material, even became a "diplomatic hard currency". "Zizhi Tongjian" records that the Tang Dynasty "gifted 10,000 pieces of silk" to Tubo as a consolation and trade exchange. In the Song and Yuan dynasties, silk was widely circulated in Central Asia, Persia and even the Eastern Roman Empire, and was regarded as "noble currency from the East".

This is also the true meaning of the "Silk Road": Silk is not only a commodity, but also a "unit of settlement" along the route. Its value is accepted by civilizations along the route, just like USDT or BTC is recognized by users in different countries today. In the past, we used silk and satin to cross borders, and now we use digital currency to cross borders.

This transaction structure sounds ancient, but it is surprisingly similar to today's virtual currency transactions. In reality, in Kazakhstan, Uzbekistan, Nigeria and other places, a large number of trade, immigrant remittances and even retail payments have begun to use USDT or DAI to complete settlement. You only need a wallet address, no need to open a bank account, no need to go to foreign exchange management, and funds can be transferred across borders within a few minutes.

Especially after the rise of the Telegram ecosystem, the issuance of USDT on the TON chain quickly exceeded 1 billion US dollars, and on-chain payments gradually shifted from hype to real scenarios: paying salaries, purchasing on behalf of others, hiring overseas teams, purchasing servers - a whole set of payment paths in the gray area are becoming as simple as sending WeChat red envelopes.

It is actually very similar to the logic of "barter + universal currency" on the ancient Silk Road: instead of using your own country's settlement system, you use a "third medium of value" that everyone trusts to complete transactions. Camel caravans have been replaced by wallet addresses, silver ingots have been replaced by tokens, the way of trust has changed, but the value of trust itself has not changed.

Why is Telegram so popular? It is not because it allows anonymous chatting, but because it has cross-border attributes, encryption foundation and user stickiness. Apart from WeChat, Telegram is one of the few "global social software", and TON is its extension in the blockchain world.

TON is the closest attempt to the "Silk Road" form in the current blockchain public chain system: it opens up the entire chain of communication, accounts, payments and transactions. Users can complete wallet transfers, receive wages, make micropayments, and even build Bot automated interaction logic in the chat box. For users in Africa, Southeast Asia, and Central Asia, this system is a realistic path to skip banks and credit cards.

TON is not an isolated case. Sui, Solana, and BNB Chain are also taking a similar "payment-oriented" path. However, compared with the "DeFi-oriented" of other public chains, TON is more like replicating a full-stack ecosystem of "transaction + identity + ledger + communication" - it is closer to the full-factor synergy of the Silk Road.

Compliance game: from the Maritime Customs Office to KYC on the chain

Of course, every time trade liberalization occurs, there will be a resurgence of regulation.

The Tang Dynasty established the "Shibosi" to manage overseas trade. The "New Book of Tang: Food and Goods" records that "Shibosi is in charge of foreign goods", which means that as long as you bring goods into China from the sea or the border, you have to declare, pay taxes, value, and exchange currency at a specific port. The Shibosi was not only a trade regulatory agency, but also the most important foreign exchange management department at the time.

Going back in time, the "Guan Duwei" of the Han Dynasty was in charge of the entrance and exit checkpoints of the Hexi Corridor, responsible for supervising the passage, tariffs, and identities of merchants and travelers from the Western Regions; while the Song Dynasty set up "Quechang" to manage licensed trade and supervised the circulation of paper money through "Jiaoziwu". These systems together constituted the real "compliance framework" on the ancient Silk Road.

If various blockchain ecosystems want to take on the role of the "Digital Silk Road", sooner or later they will have to face the same reality as the Maritime Customs in the Tang Dynasty: how to find the critical point between free circulation and national supervision.

First of all, there is the question of the role of supervision. Most blockchain projects will say that they are technology neutral, but when it has a built-in wallet, launches USDT, financial lending, and connects hundreds of millions of users around the world, it naturally has the attributes of a "financial institution." Should it be regulated, who will regulate it, and under what jurisdiction - these questions need to be answered.

The second is auditing and compliance. The on-chain data is indeed transparent, but transparency does not equal compliance. If you want to do large-scale cross-border clearing, you have to meet complex requirements such as anti-money laundering and anti-terrorist financing, which often means penetrating user identities and identifying capital paths - there is a natural tension between this and the "anonymity" and "decentralization" that Web3 users value most.

Finally, there is the issue of tax. In traditional trade, no matter how much goods you carry, how many post stations you pass through, or how many times you change horses, someone will register, value, and pay taxes. On the chain, the transaction path of P2P is vague, and the profit sources of DeFi are complicated. How should the country define "taxable transactions"? Who is responsible for tax base declaration? These are still unresolved issues.

Simply put, all the regulatory challenges that Web3 payments face today were actually experienced by the ancient Silk Road. The only difference is that the challenges back then were geography and force, while the challenges now are code and regulation.

Written after Dunhuang: We are always looking for ways to "cross the border"

The day I left Dunhuang, I drove along the G215 National Highway over the Qilian Mountains. My cell phone often had no signal. The mountain road was winding. In the distance were snow-capped mountains that never melted. Under my feet were the Gobi Desert and ancient roads that had weathered for thousands of years. In such a landscape, people seemed insignificant and technology seemed quiet, as if the digital age was still thousands of years away.

But it was in this silence that I remembered a simple but unchanging proposition: human civilization has always been an effort to cross borders again and again.

The ancients used camel caravans and paper documents to cross geography and language; today we use blockchain and smart contracts to try to cross institutions and trust. On the ruins of the Silk Road, this is not the first time we have established a cross-border settlement system, and it will not be the last. This time, however, we use codes, addresses, and on-chain consensus.

Technology will change, routes will change, but the urge to "cross the line" has never been extinguished for thousands of years. In the past, we took the physical Silk Road, and now we are trying to build a digital Silk Road. Whether it is an ancient post station or a smart contract, it is essentially the same desire - between order and chaos, we always have to open up a feasible path for trust.