It had been said that the Punjabi word for coin, 'sikka', is borrowed from Persia where it means both "a die for coining" and "rule, law, regulation." The traditional Sikh coins, were dedicated to the religious Sikh Gurus. The year of issuing of the coins was of the Bikrami era as they carry the dates of the year. The script and language used in the coins were Persian. The repeated invasions of the Punjab by Ahmad Shah Durrani led to the formation of the Sikh league which is known as 'Khalsa'. In 1710, the capital of Ahmad Shah was sacked and Banda had taken on possession of the leadership of Khalsa. He established a new era beginning with the victory at Sirhind and issued coins. The coins bore the Persian legend containing the fact that 'coin current in both the worlds; the sword of Nanak is the provider; and Guru Govind Singh, the king of kings, is by grace, the lord'. This is incised on the obverse of the coin and 'Zarb aminuddahar Maswarat-Shahar Zinatultakht Mubarak bakht (coined at the protector, the walled city, the ornament of the blessed throne) was etched on the reverse side of the coin. This coin was issued from the bastion of Banda Singh Bahadur from Mukhlisgarh in the Sivalik foothills.
After half a century, Sardar Jassa Singh Ahluvalia received the epithet of Sultan ul-qaum meaning the nation's king. He temporarily occupied Lahore in 1761and was the leader of Dal Khalsa, the confederated Sikh force. During this time he issued coins. Jassa Kalal occupied the territory of Ahmad Shah Durrani and issued coins that bore a couplet. No coin of this type had so far been seen. The legend depicted that only twenty one coins of this type were made by the Qazis and Mullas and were sent to Ahmad Shah Durrani to turn him against the Sikhs. According to some historians, they were really issued by Jassa Singh, a Sikh leader to commemorate his victory over the Durranis at Lahore. They were later withdrawn in 1764 by a decree of the Sikh Guru mata. In 1777, coins from Amritsar were issued that were termed as Nanak Shahi. The legend on the obverse was very much similar to that issued by Banda on his coins. There was a new legend, 'Zab Sri Ambrastsar julus-i-takht Akala sambat' followed by the date in the Vikrama era. In 1767, the grandson of Raja Ala Singh, Amar Singh got the permission to strike his own coins. The Patiala coins, gold mohar and silver rupee, were called 'Rajeshahi'. The coins bore a Persian distich commemorating Ahmad Shah Durrani. According to Charles J. Rodgers, Honorary Numismatist to the Government of India, "All the Maharajas of Patiala have used the same couplet in their gold and silver coins. Different Maharajas have used different signs, and it is by these that the coins are assigned to those who struck them....One strange thing is noteworthy. The mint is in Patiala city, but the name of the mint coming on the coin is Sarhind or Sahrind. When we consider that the Maharaja is a Sikh and the Sikhs account Sarhind accursed... the retention of the name seems stranger still. Ahmad Shah Durrani coined in this town, and that is perhaps the reason its name is retained on Patiala coins."
After occupying Lahore in1799, Ranjit Singh, in 1801, announced himself the emperor of the place. During his ruling period, Ranjit Singh started issuing coins. Some coins contained Persian legend and some with Guru Gurumukhi script. Ranjit Singh issued 'Moranshahi' or 'Arsi di Mohar Vale' coin in 1806-07, in honour of his favourite dancing girl whom he took as one of his queens. Akal Takht did not accept the offering made of these coins. Ranjit Singh instead of using his name on the coins used the Sikh couplet that was the connotation of 'abundance, the sword, victory and help, without delay Guru Govind Singh obtained from Nanak. These coins appeared regularly from Lahore and Amritsar throughout his reign, from Multan after 1818 and from Kashmir after 1819. These coins bore the same inscription as had appeared earlier on the Gobindshahi coins. The coins issued by Ranjit Singh were called 'Nanakshahi' which were distinguished from a tree leaf and a peacock's feather. Ranjit Singh instead of using his name on the coins used the Sikh couplet that was the connotation of 'abundance, the sword, victory and help, without delay Guru Govind Singh obtained from Nanak. These coins appeared regularly from Lahore and Amritsar throughout his reign, from Multan after 1818 and from Kashmir after 1819. These coins bore the same inscription as had appeared earlier on the Gobindshahi coins. Ranjit Singh introduced coins with the Gurumukhi script in about 1827. A few gold and silver coins are of this type were known, although most of the coins were name of copper. 'Akala Sahai Guru Nanak' was generally found on the coins and those coins were issued from Amritsar. From 1828 onwards the Lahore mint issued gold mohars which were termed as 'butkis'. Those were made of pure gold, and had, in addition to the usual distich and legend, the word vahiguru (Sikh name for God) written thrice over in Gurmukhi letters. The rupee coin contained a similar quantity of silver and on the other hand coins of lower denominations like 'dhela' or 'taka' and 'paisa' were made of copper. Sardar Hari Singh Nalva got the permission to issue coins in his name, first in 1831 in Kashmir and then in1834 at Peshawar.
The coins issued by Ranjit Singh were called 'Nanakshahi' which were distinguished from a tree leaf and a peacock's feather. Likewise, Maharaja Sher Singh issued coins in 1841-43, which were not accepted at the Takht Kesgarh Sahib, Anandpur, as offering. The coins with the Persian couplet continued to be struck after Ranjit Singh's death, till 1848. A few rupees were also known from Peshawar and Pind Dadan Khan. During the years 1861 to 1863 first a peacock tail and hen a thumb mirror appeared on the Amritsar rupees.
Moreover, the coins of Sikhs were created till the reign of the Sikh rulers and in different times he kings and rulers issued coins. During the reign of Ahmad Shah Durrani, who had created the State of Patiala, installed a Maharaja in the state. Since then, all maharajas of the state, who issued coins, used the Durrani Persian couplet. Different symbols were included to distinguish different issues. Maler Kotla also followed the same pattern for its icons, but instead of using symbols, it used the initials of the issuers. Jhind, Nabha and Kaital and the Dorga Rajas of Kashmir after 1846 issued their coins with the Persian couplets of Ranjit Singh's coins. The coins of the Jhind state were similar to the coins of Patiala in weight and same couplets were also used on the coins. Those coins were known as 'Jindia'. 'Nabha' coins that were the gold mohur and silver rupee were termed as 'Nabhashahi'. These coins bore the couplet 'deg tegh fatah' and it appeared on the 'Nanakshahi' and even on 'Gobindshahi' coins.
The rulers of Kapurthala did not strike their own coins and Nanakshahi and, later, British coins were prevalent there. Coins minted in different states were legal only within their territories. These coins were sometimes accepted in neighbouring markets close to the state boundaries. Some of the coins of Dorga of Kashmir bore the letters I.H.S, the Christian monogram.