The History of Banknotes

Publish Date: in Fun facts

The History of Banknotes

What did the first banknote look like?

Banknotes didn’t always look so neat. The first form of banknotes was made from papyrus or leather, and it was in the form of a promissory note. So, it was similar to a check that promises an individual that he will be paid a certain amount of gold or silver coins. Usually, promissory notes were issued by the government. Experts differ on which civilization was the first to use promissory notes, but it was either the Chinese or the Romans.


Why did people start using paper money?



  1. Transferring huge amounts of gold and silver was not practical as it was the target of thieves.
  2. Increased gold and silver inflation in Europe at the start of the 15th century and until the 17th century due to advanced mining techniques, and the exploration of the Americas, which increased the influx of gold and silver to the continent.
  3. The theorizing of supply and demand laws.
  4. Founding European Central Banks in the 17th century.
  5. Merchants started keeping gold and silver in banks so as not to be the target of thieves.
  6. Paper money evolved from promissory notes written for specific people, to something that holds value on its own that can be used by anyone.



Merchants started keeping gold and silver in banks so as not to be the target of thieves. 


Which bank was the first to issue money?


The first bank was a Swedish one in 1661, and the main reason was that the Swedish Krona was so heavy that it became impractical to carry. However, the first bank to issue actual banknotes, not promissory notes, was the Bank of England in 1795, and the first version was handwritten.

In Egypt, the paper version of the Egyptian pound was first printed in 1899 by the National bank of Egypt.