I've heard one explanation for the square holes on Chinese Cash coins but it may not be the only explanation. Cash coins were cast and there was excess metal around the edges of the molds and also from the sprues where metal flowed into the molds. After casting, the coins were strung on a square rod. The round extra metal could then be filed off each group of coins. The square rod prevented the coins from turning as they were being filed.

The answer to this question can be found on p. 102 of my new book, Curious Currency: "the holes were made square for ease in taking the casting flash off the edge; a square rod through the center kept the coin from shifting during filing." My authority for this statement is Doty's Money of the World, p. 53.