Chinese New Year red envelopes originated as protective charms against a demon named Sui who was believed to harm children on New Year's Eve.

The tradition of giving red envelopes, known as 'yasui qian' or 'suppressing Sui money,' dates back to the Han Dynasty (206 BC–220 AD). Originally, these were not actual currency but small round coins embossed with auspicious symbols and characters designed to ward off evil spirits. The legend describes Sui as a creature that would appear on New Year's Eve to touch the heads of sleeping children, causing high fevers and mental impairment.The practice of using red paper became widespread during the Ming and Qing Dynasties. Red was chosen for its association with 'yang' energy in Chinese philosophy—representing fire, life, and vitality. By the late 19th century, as paper became more affordable and printing technology advanced, the transition from loose coins to paper envelopes was completed. This shift allowed families to include monetary gifts while preserving the protective symbolism of the color red.Today, red envelopes remain central to Lunar New Year celebrations across East and Southeast Asia. A 2018 study by the University of Hong Kong found that exchanging red envelopes reinforces social hierarchies and kinship ties within families. While the fear of the demon Sui has faded into folklore, the red envelope's cultural significance as a symbol of luck and prosperity continues to grow. Digital versions launched by WeChat in 2014 now process billions of transactions annually during the holiday period.