China creates the world's first paper money!

Around the 7th century during the Tang Dynasty, China pioneered the creation of the world's first paper money. The concept emerged as a response to the impracticality of carrying heavy metal coins for trade. The Chinese government initially issued promissory notes for merchants to exchange for goods.

By the 11th century during the Song Dynasty, the use of paper money became more widespread. The government established the world's first official paper currency, known as Jiaochao. These notes were backed by the government's reserves and facilitated trade along the Silk Road.

However, due to issues such as overprinting and lack of backing, paper money faced periodic devaluation. Despite challenges, the innovation of paper money in ancient China laid the foundation for the development of modern currency systems worldwide.