The earliest unit of currency known in the island is referred to as a Kahapana. They are called puranas in Sanskrit and eldings in English. They are commonly known as punch marked coins, due to the marks or symbols that had been struck either on one side or both sides of the coin. Kahapanas are reckoned to have been produced by cutting strips of metal from hammered sheets. The known coins have been of many shapes, such as round, square, rectangular or oblong. Their weight had been adjusted by clipping the corners. The metal of the Kahapana has been found mostly to be silver. 

Accordingly, the coins authorized by the King carried the Royal stamp. When these coins passed from one to another, various unique markings were added by each owner. As a result, these coins bear a multitude of different symbols. One particular coin contains 20 such markings which include the sun, the moon, a tusker, a dog, and a tree. It has been determined that over 500 unique markings were used on the ‘Kahapana’ coins. It is believed that these coins were initially produced in India and not in Sri Lanka. Due to international trade, these coins reached Sri Lanka via Indian vendors. Consequently, based on these coins, Sri Lanka produced its own ‘Kahapana’.

The ‘Kahapana’ had been in use in Sri Lanka from 3rd century  B.C. to 1st century A.D. Anuradhapura, Tholuwila, Wessagiriya, Sigiriya, Bunnapola, Dedigama, Minuwangoda, Udawalawe, Ambalangoda, Tissamaharama, Vallipuram, Kantharodai, Jaffna, Mulativu, Maanthota, Padaviya, Trincomalee are some of the many places where this type of coins have been found.