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1023/1024 CEReputable source · 2 sourcesWell documented

Song China Prints the World's First Government Paper Money

Merchant deposit receipts for heavy strings of copper coins become a state-issued currency in Sichuan

On the timeline · around 1023/1024 CE · Medieval Banking and TradeMedieval Banking and TradeSong China Prints the World's First Government Paper Money700 CE800 CE900 CE1000110012001300

Quick facts

Merchant deposit receipts begin
c. 900 CE, late Tang
Government takeover of jiaozi
1023 or 1024 CE (sources differ)
Region of origin
Sichuan (Chengdu)
Predates first European paper money by
c. 600 years

What happened

In late Tang times, around 900 CE, merchants in China began trading receipts, called jiaozi, issued by deposit shops in exchange for stored valuables, a way of avoiding the physical burden of transporting large numbers of heavy copper coin strings across long distances. A small group of Sichuan shops first won a government-granted monopoly on issuing these certificates. Columbia University's Asia for Educators project dates the government takeover of the system to the 1020s, specifically 1024, while the Hoover Institution's account places the same handover in 1023; in either year, the Song government took the jiaozi system over directly in the early 1020s and began issuing the world's first government-issued paper money. The innovation solved a genuine practical problem, since copper coins were cumbersome for the volume of commerce that Song China's economy demanded. The system was not permanent: later Song and Yuan dynasty governments repeatedly overprinted paper currency to cover deficits, triggering serious inflation and forcing repeated replacements of one paper currency with another over the following centuries.

Why it matters

Song China's jiaozi predates any European paper currency by roughly six centuries; Sweden did not issue Europe's first paper money until the 1660s. The Song experience also previewed, in miniature, a lesson that would recur every time a government discovered it could print money to cover its own deficits: paper currency backed only by state promise is a tool of real economic convenience that becomes a source of inflation the moment its issuer overuses it.

How we know

The transition from merchant deposit receipts to state-issued jiaozi, and the early-1020s government takeover, are documented in Song dynasty court records and economic histories of the period, synthesized by modern scholars of Chinese economic history at Columbia University and the Hoover Institution, whose accounts differ by one year on the exact date of the handover.

Sources

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Part of a timelineHistory of Money26 events · Clay tablets that recorded debt before coins existed, a Chinese dynasty that printed the first paper money, and a currency divorced from gold in a single televised announcementView all →
Song China Prints the World's First Government Paper Money · History of Money · SourcedStory