Who Invented Paper Money? A Short History of Money
Note: the timeline labels in the image are in Turkish; the same dates are listed in the table below.
Who invented money?
Before money, goods such as shells, salt, grain and precious metals were used for exchange. The first stamped coins of a standard weight were minted in the 7th century BC by the Lydians, who lived around today’s Manisa in Turkey, from electrum – a natural alloy of gold and silver. That is why the Lydians are usually credited with inventing coins.
Who invented paper money?
Paper money originated in China. Records describe valuable leather notes in the Han dynasty (2nd century BC). In the early 9th century, under the Tang dynasty, merchants began using paper payment notes known as “flying money” so they did not have to carry heavy coins. The first official, government-issued paper money was the jiaozi, issued by the Song dynasty in Sichuan in 1024.
In the West, paper money spread at the end of the 17th century: the Massachusetts Bay Colony in North America issued paper money in 1690, and the banknotes of the Bank of England, founded in 1694, and of other central banks made paper money common.
First paper money in Turkey
The first paper money of the Ottoman Empire was the kaime, issued in 1840 under Sultan Abdülmecid. The first banknotes of the Republic of Turkey entered circulation on 5 December 1927. Sources: Turkish State Mint – History of Money, Central Bank of Turkey Virtual Museum (in Turkish).
| Date | Milestone |
|---|---|
| 7th century BC | Lydians mint the first coins |
| Early 9th century | Paper payment notes in China (“flying money”) |
| 1024 | First government paper money in China: jiaozi |
| 1690 | Paper money in the Massachusetts Bay Colony |
| 1694 | Bank of England is founded |
| 1840 | First Ottoman paper money: kaime |
| 1927 | First banknotes of the Republic of Turkey |
Frequently asked questions
Who invented money first?
The first known coins were minted in the 7th century BC in Anatolia by the Lydians, from electrum, a gold-silver alloy.
Who invented paper money?
Paper money was invented in China. Paper payment notes were used from the 9th century, and the first official government paper money, the jiaozi, was issued by the Song dynasty in 1024.
Which country used paper money first?
China. In Europe, paper money became common only at the end of the 17th century.
What was the first Ottoman paper money?
The kaime, issued in 1840 during the reign of Sultan Abdülmecid.
When were the first Turkish Republic banknotes issued?
The first banknotes of the Republic of Turkey entered circulation on 5 December 1927.
