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China's Earliest paper money -- Jiaozi

The first objects to be used as money by the people of China were natural seashells. As goods began to be exchanged with increasing frequency, the supply of seashells often lagged behind the demand for them, and so imitation shell money began to be manufactured from various materials including stone, jade , bone, and copper. Around 200 BC, various metal coins appeared as a result of the rapid development of the commodity economy.

The Qin Dynasty (221-207BC), the first feudal dynasty to unify China, unified the currencies, bringing the Ban Liang (half tael) coins into use across the whole nation. These coins were circular in shape with a square hole through the middle; a shape that expressed the ancient Chinese belief that heaven was round and the earth was square.

China was the first country in the world to use paper currency -- Jiaozi. The history of Jiaozi dates back to the Northern Song Dynasty (960-1127).

During this time, merchants in Chengdu distributed one of the earliest known paper money. The currency was called Jiaozi, a kind of printed-paper certificate, to replace the iron money. With the high circulation of the currency, the local government of Chengdu established the earliest administrative and savings bank known as the Office of Jiaozi. The word Jiaozi then began to be used as a general term for money. In 1023, the authority of the Song Dynasty issued official Jiaozi while banning private issuing.

Jiaozi was the first paper money not only in China but also around the world. Paper money proved popular in the later dynasties like the Yuan (1271-1368), Ming (1368-1644), and Qing (1644-1911), but it had never replaced the metal coins in circulation. The round coins with square holes continued to be used in China for more than two thousand years, until the late Qing Dynasty .

It was only in modern times that the large-scale issue of paper currency came into being.