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Song dynasty paper money (jiaozi)
1024· Asset or instrument
Fact, law or dataA rule, statute, definition or measured number.
China's Song dynasty issued the world's first government paper money, the jiaozi, in 1024 in Sichuan.
See it on the Money & Finance map →How it works
Sichuan used heavy iron coins, so merchants began issuing paper deposit receipts in the late 900s. After frauds and failures, the government took over in 1023 and issued official jiaozi from 1024, in fixed batches that expired after a few years and were partly backed by coin reserves. Later Song governments printed more to fund wars against the Jin and Mongols, and the notes lost value. The Mongol Yuan and early Ming made paper their main currency.
Why it matters
It proved a state could make paper accepted as money, and showed the risk every fiat currency since has faced: overprinting.
Facts, rules and data
Song official histories record the issues. No original jiaozi survive, but later notes and printing plates do, and Marco Polo described Yuan paper money around 1300.
Debates and risks
Historians debate how fully early jiaozi were backed, and how much paper money's decline weakened the Song and Yuan states.
Connections (2)
▸Song dynasty paper money (jiaozi) was an early form of Fiat money: currency backed by law and trust, not metalFact, law or data
The connection
The jiaozi showed paper could circulate on the state's authority. Partly backed at first, Song and later Yuan notes rested more and more on government decree rather than redeemable metal, making them early forms of fiat money, about 950 years before the dollar's full switch.
When and why
Sichuan, China, from 1024; Yuan and early Ming paper money from the 1260s into the 1400s.
How we know
Song and Yuan official histories, surviving notes and printing plates, and Marco Polo's description of paper accepted across the Mongol empire.
Debates and risks
Whether jiaozi count as true fiat money or as backed notes depends on the period; historians date the shift differently.
▸Song dynasty paper money (jiaozi) eventually suffered Inflation: rising prices, shrinking purchasing powerFact, law or data
The connection
To pay for wars against the Jin and then the Mongols, Southern Song governments printed ever more paper notes, by then called huizi. With more paper chasing the same goods, the notes lost value. The Yuan and Ming repeated the pattern until Ming notes became nearly worthless.
When and why
China, mainly the 1100s–1200s under the Southern Song, and again under the Yuan and Ming into the 1400s.
How we know
Official histories record rising note issues and falling exchange rates against copper coins and silver.
Debates and risks
How much the inflation weakened the Song before the Mongol conquest of 1279 is debated among historians.