China created the world's first paper money
Nearly 700 years before Sweden issued the first European banknotes in 1661, China released the first generally circulating currency. In fact, usage of paper notes dates backs even earlier, to the 7th century Tang Dynasty. For centuries copper coins had been China’s primary currency. In order to carry large amounts of cash, people hefted around an ever-increasing number of these coins–not the easiest, or safest, thing to do over long distances. In an attempt to lighten their load, merchants began to deposit these coins with each other and were issued paper certificates for the coin’s value. The paper was certainly lighter. So light, in fact, that it is believed to have earned the nickname “flying money,” for its tendency to blow away in a stiff wind. The use of paper money remained in place for the next 200 years, until a copper shortage and inflation from overproduction of the bills forced merchants and Song Dynasty government officials alike to issue and accept paper notes backed by gold reserves—the first legal tender in the world.
