Abstract: In the 1920s and 1930s, there were some changes in the ways and functions of the indirect issuance system in the banking industry of modern China. On the components of indirect issuance reserves, the partial reserve system developed into the full reserve system and became the common norm. In the way of using the indirect issuing banknotes, not only the Joint Treasure appeared in the banking industry, but also the method of indirect issuance by correspondent bank carried out. In terms of indirect issuing eligibility and policy, large issuing Banks also allowed commercial Banks with issuing rights to abtain banknots from them.In addition, in the process of the implementation of the Fabi (“法币”) policy, the Four Banks made concerted efforts to allow financial institurions and even individual traders to obtain Fabi from the issuing bank. Affected by the changes of the economic environment, the indirect issuing system had been constantly used and reformed, becoming an effective means to promote the use of specific banknotes