Song Dynasty Paper Money (Jiaozi)

Merchants in Chengdu, Sichuan, began issuing jiaozi, promissory notes redeemable for the heavy iron coins then in local circulation, in the closing years of the tenth century. On January 12, 1024 (the eleventh month of the first Tiansheng year), the Northern Song government established the official Yizhou Jiaozi Office and took over the issue, making jiaozi the world's first government-backed paper currency, roughly six centuries before Sweden issued Europe's first banknotes. The innovation solved a genuine transport problem: purchasing one bolt of silk with iron coin could require more than ninety catties of metal.