jan 1, 997 - Paper Currency

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The first known examples of paper currency as we would understand it today were created in China during the Song Dynasty. Promissory notes known as "Jiaozi" were printed by a group of merchants in Sichuan during the reign of Emperor Zhenzong. These notes were exchangeable for coin-based money and could be exchanged between individuals. This paper currency was initially popular, but became plagued by inflation problems after a few decades. It was replaced by notes known as "Huizi", which were printed by the government in their own printing houses.

Marco Polo describes paper banknotes in his writings on China; "All these pieces of paper are, issued with as much solemnity and authority as if they were of pure gold or silver... with these pieces of paper, made as I have described, Kublai Khan causes all payments on his own account to be made; and he makes them to pass current universally over all his kingdoms and provinces and territories, and whithersoever his power and sovereignty extends... and indeed everybody takes them readily, for wheresoever a person may go throughout the Great Khan's dominions he shall find these pieces of paper current, and shall be able to transact all sales and purchases of goods by means of them just as well as if they were coins of pure gold"

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