First paper money in Europe

Tuesday, July 16, 1661

Using coins and paper money to make payments is quite commonplace these days. However, a few centuries ago, Europeans had little faith in banknotes. Precious metal coins possessed worth, but banknotes were just printed pieces of paper to many.


However, it was inconvenient to use the money to pay for large purchases. In addition, the metal reserves of some countries were decreasing.

The price hike was due to paper currency.

The first banknotes in Europe were in circulation 363 years ago today, on July 16, 1661, when Johan Palmstruch of Sweden formed the "Stockholm's Banco" in the mid-17th century.


Thus, Palmstruch is considered the "inventor" of paper money in Europe.

Yet, the bank created and distributed an excessive number of banknotes when paper money was first introduced, which resulted in inflation. The first German banknotes were printed in Cologne in 1705.

Paper money is a relic from the past.

It is reported that banknotes were used for payment by the Chinese as early as the seventh century. The earliest known banknotes are from the fourteenth century.