Last updated: September 2026

What was the first banknote in Europe?

The first banknotes in Europe were the credit notes issued by Stockholms Banco in 1661. Sveriges Riksbank, the central bank that grew out of that failed institution, puts it plainly on its own historical timeline: Stockholms Banco issued the first real banknotes in Europe, and the first of them went out in July or August that year.

The word "real" is doing work there. Europe had paper instruments long before 1661: bills of exchange, goldsmiths' receipts, and the Bank of Amsterdam, established on 31 January 1609, whose book-entry system let account holders settle payments without moving metal (Beursgeschiedenis). All of that was paper. None of it was a banknote.

Palmstruch's innovation was structural. Earlier notes had invariably been tied to deposits; his were not, relying instead on public confidence that the bank would redeem them on demand (Sveriges Riksbank, Money and Power). That is the banknote as it is still used today. The Riksbank illustrates one for 100 daler silver coin, about 155 by 195 millimetres, and notes that China tried the idea in the 11th century, the subject of our page on the first paper money in China.

Why did Sweden issue banknotes before anyone else?

Because Swedish money had become physically unmanageable. Sweden introduced a copper standard in 1624, and since copper is worth far less than silver, replacing small silver coins meant minting enormous copper plates. The largest weighed almost 20 kilos, which made a printed promise an obvious improvement.

The copper standard was not a whim. Sweden was short of silver and gold after decades of war and wanted to hold up the price of copper, its main export. The Falu mine supplied two thirds of Europe's copper at the time, and coining some of it was meant to cut exports and lift the price (Sveriges Riksbank).

A bank run supplied the second trigger. In 1660 the government began minting coins of lower weight, depositors worked out that their old coins carried more metal, and they came to collect. Palmstruch answered with deposit certificates, and the step to freestanding credit notes was short. He said the idea came from receipts the Stora Kopparberg copper company issued to its miners.

What happened to Stockholms Banco and Johan Palmstruch?

Stockholms Banco printed more notes than it could redeem, lost public confidence, and failed. Liquidation began in 1664, and in 1668 the Svea Court of Appeal convicted Johan Palmstruch of mismanaging the bank. He was reprieved, stayed in prison until 1670, and died the following year.

Karl X Gustav issued charters for an exchange bank and a loan bank to Palmstruch on 30 November 1656, and the bank opened on 29 July 1657. The credit notes followed in 1661 and were a success, because anyone who had carried a copper plate could see the point of paper.

Then the lending outran the metal. The flood gates opened during 1663: the Crown borrowed 500,000 daler kopparmynt and Chancellor Magnus Gabriel De la Gardie took 255,000 for himself. By 12 September the bank held under 4,000 in ready cash, and paying with notes cost 6 to 10 per cent more than coin. In 1664 the Council of the Realm ordered the loans repaid and the notes withdrawn.

Two versions of Palmstruch's sentence

Here the sources part company. The Riksbank's timeline says Palmstruch "was sentenced to death for mismanagement of the bank in 1668" (Sveriges Riksbank). Its book-length history is more specific: on 22 July 1668 he was dismissed, lost his privileges, was banished for life and ordered to make good every proven shortage within six months, with execution only if he failed to pay. He was reprieved in February 1669 and released in 1670.

In the same year as the verdict, Riksens Ständers Bank, today's Sveriges Riksbank, was founded from the ruins of Stockholms Banco. It is the world's oldest central bank (Sveriges Riksbank). The lesson stuck: it avoided banknotes for decades, issuing transport bills from 1701 instead, signed over from owner to owner (Sveriges Riksbank).

How did the Bank of England start issuing banknotes?

The Bank of England was founded on 27 July 1694 as a private bank whose job was to lend to the government, primarily to fund the war against France. It opened on 1 August 1694 in temporary rooms at Mercers' Hall in Cheapside with 17 clerks and two gatekeepers, and it issued handwritten running cash notes to depositors from the start.

King William and Queen Mary were among the original stockholders, the founding capital issue was £1,200,000 of Bank Stock, and the Royal Charter said the Bank was founded to "promote the public Good and Benefit of our People" (Bank of England). Sir John Houblon, the first Governor, later appeared on the £50 note.

From handwriting to printing

Early notes were written for the exact sum deposited, which is why the oldest survivors carry odd amounts. The museum's earliest is a handwritten fragment dated 18 June 1697, made out for 22 pounds, one of the earliest known running cash notes issued by a Bank cashier (Bank of England Museum). A complete 1699 note is made out for £150 8s 8d. Standardisation came in dated stages:

• 1725. Partially printed notes for £20 and upwards in increments of £10, the highest denomination £90, with the cashier free to write the value up by as much as £9 19 shillings 11 pence.
• 1743. Printed sum blocks, the denomination in white letters on black, introduced to make alteration harder (Bank of England Museum).
• 1793. The £5 note, prompted by the gold shortage of the French Revolutionary Wars.
• 2 March 1797. The £1 and £2, the oldest entries on the Bank's own list of withdrawn banknotes (Bank of England).
• 1844. The Bank Charter Act formalised note issuance, restricted other issuers in England and Wales, and stopped any new bank from starting to issue.
• 1855. The £5 became single-sided and fully printed. That white fiver stayed in circulation until 1957.

The Restriction Period is where the Bank's paper stopped being a receipt for metal. France declared war in 1797, the public rushed to convert notes into gold, reserves fell from £16 million to £2 million, and William Pitt the Younger ordered the Bank to stop paying in gold. More detail sits on our Bank of England note history page and the Great Britain banknotes hub.

What was John Law's paper money and why did it fail?

John Law was a Scottish financier who persuaded the French regent to let him run a note-issuing bank. From 1716 his Banque Générale issued paper money against gold on a large scale, with the guarantee of the regent Philippe d'Orléans from 1718. The issuance got out of hand, the bank could not meet requests for conversion, and it went bankrupt in 1720.

That summary is the Banque de France museum's own (Citeco). The Federal Reserve Bank of New York adds the setting: in 1716 Law proposed to the Duke of Orléans a state bank, funded at his own expense, issuing paper redeemable in gold and silver, and his was then one of only six banks anywhere to have issued paper money, joining Sweden, England, Holland, Venice and Genoa (Federal Reserve Bank of New York). Europe's paper money club was that small, sixty years after Palmstruch.

What turned a bank into a bubble was the trading company attached to it. Law's Mississippi Company, formed to exploit the Louisiana territory, sold shares against the promise of colonial riches. By mid-1719 it had issued more than 600,000 shares at a par value of 300 million livres, and Law became Controller General in January 1720. Before the year was out the price had collapsed and Law had fled France.

The same year produced the parallel British disaster. The South Sea Company, founded in 1711, was granted part of the national debt in 1720, its stock soared, prices crashed and thousands were ruined. The Bank of England calls it the first financial crisis in its own history.

Which European banks issued the first banknotes?

Eight issuers define the first century and a half of paper money in Europe and its colonies. The table sets out what stood behind each issue and how it ended.

Two patterns stand out. Over-issue destroyed the early experiments fast: Stockholms Banco lasted three years once the Crown began borrowing in its own notes, and Law's bank four. And the survivors were issuers tied to a state that could be held to the promise.

Where did the first paper money in the Americas appear?

Earlier than most people expect, and not in an English colony. Playing-card money appeared in New France in 1685, when French administrators reused playing cards to address a shortage of royal coin. The Massachusetts Bay Colony followed in 1690, and that issue is the birth of paper currency in what became the United States.

The two dates answer different questions. The Banque de France museum records the 1685 card money of New France as a genuine issuance of money (Citeco). The US Currency Education Program dates American paper currency to the Massachusetts issue of 1690 (US Currency Education Program), and the historian Ron Michener adds that those bills paid soldiers returning from a failed expedition against Quebec (EH.net Encyclopedia). Massachusetts therefore beat the Bank of England by four years.

The colonies also produced one original security idea: in 1739 Benjamin Franklin printed notes with nature prints, raised patterns cast from real leaves, since no two leaves match. See our history of counterfeiting. The era closed with Continental Currency in 1775, which runs into the history of US paper money.

What came after Europe's first banknotes?

The next century produced the first full-scale demonstration of what happens when a government prints paper against an asset it cannot actually deliver. France issued assignats from 1789 to 1796, backed by confiscated church land, and the notes lost virtually all their purchasing power.

In November 1789 the National Assembly placed church property at the disposal of the nation, and in December authorised the first 400 million livres of assignats, redeemable by buying that land. Issues kept climbing, war from 1792 demanded more paper, and in February 1796 the plates were smashed and burned in the Place Vendôme. Our French assignats page traces the arc.

France's caution afterwards was profound. The Banque de France, founded on 18 January 1800 at Napoleon Bonaparte's instigation, issued notes payable to bearer against discounted commercial bills. It won the privilege of issue for Paris in 1803, producing the first franc germinal banknote, and a monopoly across the country only in 1848 (Banque de France).

Elsewhere the line straightens. Sweden's modern-looking notes came in 1835, and Norway, after Thor Møhlen's failure of 1695, established Norges Bank on 14 June 1816 (Norges Bank). From there it runs unbroken to the note in your pocket: the Bank of England issued its first polymer note, the £5 featuring Sir Winston Churchill, on 13 September 2016.

Can you collect early European banknotes?

Genuine 17th-century European notes are museum material rather than collector material. Palmstruch credit notes and early Bank of England running cash notes survive in very small numbers, in institutional collections. What collectors can realistically hold starts in the 18th century and becomes plentiful in the 19th.

French assignats are the practical entry point. Printed in the billions and never redeemed, they survive in enormous numbers, which makes genuine 230-year-old revolutionary paper one of the most affordable 18th-century collectibles anywhere. British issues become collectable from the 19th century onward. For the oldest notes that exist at all, see the oldest banknotes still in existence.

Buy the best grade you can afford, because on European material condition drives value far more than age. Check the catalogue first, using our guide to Pick numbers. And buy from a dealer that documents provenance. Browse banknotes by country.

Planet Banknote is a family-owned dealership in Sarasota, Florida, founded in 2021. Every note is sourced direct from mints, central banks, and authorized distributors, inspected through our Planet Banknote Verified process, and ships with a free Certificate of Authenticity. US orders ship free via USPS Priority, and every order includes a free bonus gift.