What is the purpose of the hole? Is it so someone can put the coins on a string to keep them together? Or is there another reason?
There is that, but another possible reason is that, with a hole, coins can be "bigger" (in terms of the total diameter). This way, metal may be saved. Or you can have two different denominations, with pretty much the same size, which are still easy to keep apart ... Christian
I think it BECAME that. To me, most holed coins in the world started from the idea of Chinese cash. That is how most people got used to the idea. Later on I believe Christian is right, but the Europeans first started putting holes in the center of their coins only for coins to circulate in their Asian colonies, and it was accepted and practiced there simply because the cash coins were in circulation for 2000 years in the area. In eastern Asia, a round coin with a square hole is simply what money "looked like". You would be surprise how strong an influence this is, especially a 2000 year old one. Btw, the square hole originally was a ying yang balance thing when first practiced in China, but they soon found beneficial side effects. One, they could put the cast coins on a square rod to scrape off excess metal easily, and two, they could put them together on a string. Cash was too successful, really. It was so brilliantly done it probably procluded the invention of silver coinage in China, since it was easy to just use strings of copper cash in their place.