First paper money

The earliest forerunner of today's banknotes was the "Flying Money" used by wealthy merchants and government officials in Tang Dynasty China (AD 618–907). These were documents equivalent to present-day bank drafts which allowed an individual to deposit money with local officials in exchange for a paper receipt that could be redeemed for an equal sum of money somewhere else. Flying money could not be exchanged between individuals, nor was it available to the general public. The first known examples of paper currency as we would understand it today were created in China during the Song Dynasty (AD 960–1279). Promissory notes known as "Jiaozi" were printed by a group of merchants in Sichuan during the reign of Emperor Zhenzong (AD 997–1022). 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.

Each note was about the size of a sheet of A4 paper (US letter), and consisted of a copper-plate-printed pastoral scene with pictures of coins and a warning to counterfeiters underneath. Printed notes were embellished with a hand-written denomination and red ink stamps of authenticity. No examples of the notes survive, although archaeologists have uncovered one example of a printing plate used in their production, dating from around 1023.