10 Fun Facts About the Weird and Wonderful History of Money
By
Abdul Waha
3. Paper Promises: The Advent of Banknotes
Japanese government small-face-value paper money, "Fuji-Sakura" 50 Sen (1/2 Yen). Mt. Fuji and cherry blossom. First issued in 1938. Expired in 1948. 65mm x 105mm. Photo Credit: Wikimedia Commons @Eclipse2009The leap from metal coins to paper money was driven by necessity and innovation. Originating in China during the Tang Dynasty, paper money was initially used by merchants as promissory notes to represent large sums of coins stored elsewhere. By the Song Dynasty, these notes evolved into government-issued currency, backed by the state. The use of paper money spread to the Middle East and Europe, revolutionizing trade by making large transactions more feasible and less cumbersome. This shift marked the beginning of fiat money, where value is derived not from the physical material but from trust in the issuing authority, a concept that underpins modern economic systems.
