Who Made Paper Money
Restored from the Empower Network archive (2011–2017), lightly edited to meet our current advertising standards. Views are the original author’s.
Who Made Paper Money
Though most people do not know who made paper money and when it was done, you need to understand that paper money came to existence much later compared to coins. Coins used to be accepted as the only form of money and people did not know what paper money was. Most of us were born and found that there was paper money already. Perhaps, this is the reasons why we have never been bothered to know something about paper money. It is however, very important to know who made paper money and this article will not only give you the person or group of people but also a lot of information about paper money.
What is Paper Money
Before looking at who made paper money, it is worthwhile looking at what paper money is and what it is made of. Paper money, otherwise known as banknotes refers to a “negotiable instrument” usually issued by central banks or governments and it is considered and accepted as a legal tender for that particular country. The value of the banknote or paper money is equivalent to a denomination, which is usually assigned to it. With the increased use of credit and debit cards, the demand of paper money has slightly decreased. However, in many parts of the world, paper money is still the most important and popular mode of exchange.
What is Paper Money Made from?
Answering the question of ‘who made paper money’ without looking at what paper money is made of will leave the discussion incomplete. Although the exact material from which money is made of varies from one nation to another, to have an idea, the US paper money is made from 75% cotton and 25% linen. Before World War I, the American paper money was made from silk fiber.
Who Made Paper Money – History of Paper Money
If you have been curiously waiting to get a name of who made paper money first, it is not a single person who invented paper money since money is used between people who want to trade services and goods. It was actually invented by a group of people who after using coins to trade, they realized that coins were cumbersome and they were bulky too. In fact, in those times, coins were very bulky since technologies to make smaller coins of higher values were not there. Imagine how you could transport a million coins from one place to another considering that there were not vehicles in those days.
It is clear that money was invented by a group of traders and the subject matter is no longer, who made paper money but which groups of traders made paper money and when did it happen. It is believed that paper money was made by the Chinese people at around 650 AD. This happened because many people wanted to deposit large amounts of money, which was then in coins form in vaults owned by other people who would then make a cut by safeguarding the money. This is the genesis of financial institutions, which safeguards money on behalf of the owners at a small fee. Whenever people deposited their large amounts of coin money in the enterprises that stored money safely, they would receive promissory notes. These promissory notes became the first paper money because they represented the value that was deposited and were later used to trade with other people.
Another group of people who made paper money is the Swedes. The Swedes are the first people to use money in Europe and their use of paper money happened several hundred years after the Chinese had began using paper money. Their use of paper money quickly spread to Western World and governments from different parts of the world adopted paper money as their trade and commerce medium of exchange.
The quick growth of use of paper money was aided by integration of the world through trade, which spread paper money use from Europe to other continents such as America and Africa, and the whole world now uses paper money as the main medium of exchange. Although the use of coins is still widespread all over the world, they generally represent lower values compared to paper money. I trust you now know who made paper money and its spread to the rest of the world.