Last updated: September 2026

Who invented paper money?

China did, and the timing is not close. Merchant houses in Sichuan issued the first circulating paper notes in the 10th century, and the Song government nationalised the system in the 1020s. Europe's first banknotes came in 1661, some six and a half centuries later.

There is a reason it happened in China. The Chinese invented paper and were also the first to develop printing, so the two technologies a banknote requires existed there long before they existed anywhere else. The National Bank of Belgium's museum makes exactly this point: China had a natural predisposition to use paper money first, because the Chinese themselves invented paper (National Bank of Belgium Museum).

The economic trigger was a metal shortage. Chinese coinage was copper, strung in ligatures of a thousand pieces, and the museum dates the scarcity as far back as the 6th century, when copper for cash coins became short enough that even the token coins burned as offerings for the dead were replaced by paper. Paper money solved a supply problem, not a philosophical one, exactly as it later did in Sweden, where copper plates weighing up to 20 kilos produced Europe's first banknotes.

What was Tang flying cash (feiqian)?

Feiqian, or flying cash, was a Tang dynasty transfer draft, not a banknote. A merchant deposited coin in the capital, received a certificate, and redeemed it for coin in a distant province. It arose under Emperor Xianzong, who reigned from 805 to 820, and was officially recognised in 812.

The distinction matters, because flying cash is routinely and wrongly described as the world's first paper money. A feiqian certificate was a named instrument for one specific transfer between two specific points. It did not pass from hand to hand as money, and it carried a fee: the standard charge was 100 coins per 1,000 transferred (Ulrich Theobald, ChinaKnowledge).

What flying cash did do was train a commercial class to accept that paper could stand for money. By the end of the Tang, traders were routinely depositing valuables with their corporations for bearer notes called hequan, and the authorities had begun issuing their own compensation notes against deposits in the government treasury. Feiqian stayed in use into the early Song, by which time something genuinely new was happening in Sichuan.

What were jiaozi, and when did the state take over?

Jiaozi were the first true banknotes: printed, transferable receipts issued by private merchant houses in 10th-century Sichuan against deposits of iron coin. After a run of bankruptcies among the issuers, the Song government founded a Paper-Notes Office in 1023 and issued its own first series in 1024.

Sichuan is where this had to happen. The region used iron coinage rather than copper, and iron coins are heavy relative to their value, so the case for paper was overwhelming. Merchant houses took deposits and issued printed certificates against them, charging 3 per cent when a holder cashed one in. The sixteen largest houses eventually standardised the design between them, and that is the moment a private receipt becomes a currency: a note from one house was good with the customers of the others (Ulrich Theobald, ChinaKnowledge).

Private issue then did what private issue tends to do. Some houses failed, holders were left with paper nobody would honour, and the state stepped in. The Paper-Notes Office, the jiaozi wu, was founded in 1023 on the proposal of Xue Tian, prefect of Yizhou, the prefecture centred on Chengdu. The first government series followed in 1024.

What the Song created, in the words of the UCLA economic historian Richard von Glahn, was "the world's first viable paper currency" (von Glahn, 2010). It was also a deliberately limited one, denominated in iron coin and restricted to Sichuan rather than the empire, and it was replaced in 1107 by a successor note called qianyin. Guinness World Records recognises this Sichuan issue as the first paper money and notes that no Song specimens survive, though a printing plate dated to around 1023 has been found (Guinness World Records).

What were huizi and the Jin jiaochao?

Huizi were the Southern Song's empire-wide paper currency, issued by the Ministry of Revenue from around 1160 and made permanent in 1170. The Jin dynasty in the north ran its own parallel system, jiaochao, from the mid-1150s. Both abandoned convertibility under the pressure of war.

Huizi are the moment paper money stopped being a regional convenience and became national money. The first denomination was 1 guan, with 200, 300 and 500 wen notes added in 1163, and issues ran on a three-year cycle so old notes could be called in as new ones went out. That cycle was the discipline in the system, and it did not survive contact with war: after 1207 convertibility was abandoned and issues became enormous (Ulrich Theobald, ChinaKnowledge).

The Jin story runs in parallel and ends in the same place. Jin jiaochao appeared from the mid-1150s in twelve denominations, from 100 wen up to 10 guan, and convertibility was suspended permanently after the wars of 1206 to 1207 and 1211 to 1214. A Jin printing plate dated 1214 survives, a reminder that for the first two centuries of paper money the tooling routinely outlasted the notes it printed.

Timeline of Chinese paper money

Six systems, four dynasties, and a repeating pattern: a convertible issue, a war, an inconvertible issue, and a collapse. The table sets out each issue with what stood behind it and how it ended.

What was Kublai Khan's chao, and what did Marco Polo see?

Kublai Khan issued the Zhongtong chao in 1260, and under the Yuan paper became the only currency the law recognised. Marco Polo watched the system working and wrote the most famous description of paper money ever set down, which nobody in Europe believed when he got home.

The Mongols had been issuing notes since 1236, but Kublai's 1260 issue is the one that mattered: a single paper currency for the whole empire. A new currency followed in 1287, the Zhiyuan chao, exchanged at five old notes for one new, and the exercise was repeated in 1309 at the same ratio (Yule and Cordier, The Book of Ser Marco Polo). Each of those exchanges was a haircut on every note holder in the empire, applied by decree.

Polo's account, in Henry Yule's translation, describes the mint at Khanbalik in forensic detail. The Khan, he wrote, "makes them take of the bark of a certain tree, in fact of the Mulberry Tree", and the sheets are cut, sealed and signed by appointed officers. His verdict was that "you might say he hath the Secret of Alchemy in perfection", and on enforcement, that nobody "dares to refuse them on pain of death". Worn notes could be exchanged for fresh ones at a charge of three per cent.

One line often quoted from Polo, that anyone forging the notes would be punished with death, appears only in the Ramusio version and is marked as such in Yule's edition. It describes Yuan practice fairly, but it is not in the core manuscript.

What was the Da Ming Baochao, and why did the Ming give up on paper?

The Da Ming Baochao, the Great Ming Circulating Treasure Note, was issued from 1375 after a supervisorate was founded in 1374. It was printed on mulberry fibre, it was never convertible into anything, and it lost almost all its purchasing power within 150 years. Use of paper money was suspended around 1425.

Physically it is imposing, the largest bill ever produced in China, and surviving specimens cluster around 340 by 220 millimetres. The British Museum's example, registration number CIB,EA.260, measures 340 by 218 millimetres with a production date of 1375 (British Museum). A second museum note, 1942,0805.1, measures 341 by 222 millimetres, and the Smithsonian's National Numismatic Collection holds seven Ming kuan notes with measurements of their own (Smithsonian National Museum of American History).

The design is a whole monetary system printed on one sheet. The heading names the issuer and the dynasty's founder, Hongwu. The value, one guan, is shown as ten little piles of coins. Seal-script inscriptions read "Note of the great Ming dynasty" and "Circulating within the Empire". A guan was worth 1,000 copper coins or one liang of silver, and smaller notes ran from 100 to 500 wen.

The system failed because the Ming printed continuously without withdrawing old notes. In 1380 one guan was worth 1,000 copper coins. By 1535 one guan was worth a fraction of a single copper coin. The state suspended the use of paper money around 1425, the last documentary mentions trail off around the middle of the 15th century, and China then went without a national paper currency for centuries and returned to silver.

Why did China's paper money systems collapse?

Every Chinese paper currency failed the same way. Each began convertible into coin or silver, each met a war or a fiscal emergency, each responded by suspending convertibility and printing more, and each then lost value until it stopped working.

Mervyn King, then Governor of the Bank of England, put the diagnosis in one sentence when he discussed the Ming note with the British Museum: "They didn't have a central bank, and they issued too much paper money" (A History of the World in 100 Objects, episode 72). That is not hindsight. The Song built a three-year issue cycle precisely to prevent over-issue, and it worked until war made it inconvenient.

The failures split into two mechanisms. Song and Jin paper died of suspended convertibility: the notes really were redeemable until a war made redemption awkward, and the discipline left with the promise. Yuan and Ming paper never carried a redemption promise at all, so the state took value back by other means, twice revaluing the entire Yuan note stock at five old for one new. Europe then repeated both mechanisms: Stockholms Banco in the 1660s, John Law's bank in 1720, and revolutionary France's assignats. For the modern Chinese case see China's 20th-century hyperinflation and every hyperinflation ranked.

Can you collect Chinese paper money today?

Not the early material. No Song notes are known to survive, Jin and Yuan notes exist only in museum collections, and genuine Ming 1 guan notes are institutional objects rather than market goods. Collectable Chinese paper begins centuries later, with Qing and republican issues and the modern renminbi.

That gap is the most useful thing to know before shopping for "ancient Chinese banknotes". Reproductions of the Ming 1 guan are made in quantity and sold as decorative items, and they are easy to place once you know that authentic examples live in the British Museum and the Smithsonian rather than in dealer inventory. Our page on replicas and novelty notes covers how to tell the categories apart, and the oldest banknotes still in existence sets out which early notes survive and where.

What you can collect is deep and rewarding in its own right: late imperial issues, the provincial and foreign bank notes of the treaty-port era, the nationalist-era inflation notes, and the People's Bank of China series from 1948 onward. Start with the China banknotes hub for the country overview and the history of the renminbi for the modern series, then browse current stock in China banknotes.

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.