China Invents Paper Money

In the early 11th century CE, the Song Dynasty government in China issued the world's first official paper currency — the jiaozi — initially in Sichuan province where heavy iron coins made trade impractical. Merchants had already been using private "flying money" certificates, but the government monopolized and formalized the system around 1024 CE. The notes were printed on mulberry bark paper using woodblock printing, bore official seals, and could be exchanged for copper coins. The innovation spread: the Yuan Dynasty later issued the chao, a nationwide paper currency that astonished Marco Polo when he visited in the 1270s ("the Great Khan causes the bark of trees to be made into something like paper, and this he causes to pass for money over all his dominions"). Paper money wouldn't appear in Europe until Sweden issued banknotes in 1661.