Paper money, as an important part of the modern financial system, can be traced back to ancient China, especially Jiaozi, an innovation during the Song Dynasty. This landmark invention not only revolutionized the way human beings transact, but also heralded a huge shift in the medium of circulation in future economic activities.
During the Northern Song Dynasty (960-1279) in China, commercial activities flourished, the commodity economy developed rapidly, and the inconvenience of carrying metal currencies such as copper coins in long-distance ** became increasingly prominent. At the end of the 10th century, especially in Sichuan, a paper credit certificate called "Jiaozi" came into being, marking the birth of the world's earliest paper money. The original Jiaozi was issued by a private firm and promised to exchange iron money, and then it was gradually accepted by the government and issued by ** supervision, becoming a form of national legal tender.
The design and use of Jiaozi fully reflected the understanding and application of the credit system in the society at that time, which no longer relied on the specific value of precious metals, but was based on the credibility of the issuing institution and the guarantee of national laws for circulation. This form of credit-based currency laid a theoretical foundation and practical precedent for the widespread adoption of paper money in countries around the world.
With the passage of time, the production process, anti-counterfeiting technology and issuance management of banknotes have been continuously improved. In the Yuan Dynasty, Jiaozi evolved into "treasure banknotes", which further strengthened the position of paper money in the monetary system. It was not until the middle of the 17th century that Sweden issued the world's first modern bank banknote, and then Britain, France and other countries followed suit, and paper money began to spread around the world.
Today, paper money still occupies an important place in the monetary system of various countries, although it faces the challenge of new forms of money such as electronic payments. Whether it is a physical currency or a symbol, the existence of paper money confirms the continuous pursuit and innovation of human society for convenient, safe and effective management of monetary liquidity since Jiaozi in the Song Dynasty. At the same time, the emergence of early paper money was also an important economic and social change in human history, which profoundly affected the development of the global monetary system.