A History of Printed Money

Use of receipts representing money in the modern sense can be traced to early Roman times, when money lenders would accumulate deposits of coin to lend to borrowers, and write receipts to depositors to certify ownership of the amounts deposited and lent out. Some money lenders would let depositors endorse their receipts to third parties. Once receipts for specific amounts of value, but not specifying a bearer by name, were written and circulated, true paper money came into being.

Lenders also formed business liaisons between themselves, recognizing and accepting receipts issued by other members of the same group, such as a banking guild. This practice soon broadened to include lenders in other towns, some significantly distant from one another. Given the dangers of travel between population centres 2000 years ago, the convenience for travellers of obtaining a certificate of deposit from a lender in one place, recognized by a lender in another, was a great advance over carrying large amounts of gold or silver on their person. As for the lenders, when they needed to clear balances, they could pool their resources to form guarded caravans to protect the movement of gold between cities. Few individual travellers could afford such services on their own.

Surviving literature from the Roman period does not confirm money lenders went to the next level of writing and circulated bearer receipts representing specific, repeated, face-values in gold or coin. If they had, the concept would have constituted the first paper money in the modern sense of the term. Based on available ancient sources of information, the honour of inventing and using paper money in that manner goes to the Chinese.