Jiaozi Essays

Fiat money originated in 11th century China, and its use became widespread during the Yuan and Ming dynasties. Song Dynasty Jiaozi, the world 's earliest paper money. The Song Dynasty in China was the first to issue paper money, jiaozi, around the 10th century AD. Although the notes were valued at a certain exchange rate for gold, silver, or silk, conversion was never allowed in practice. The notes were initially to be redeemed after three years ' service, to be replaced by new notes for a 3% service

the iron coinage dropped dramatically. Therefore, the Song Dynasty introduced bills, jiaozi, to take the place of coins even though paper bills were more susceptible to foreign forgery. In order to increase the value of the jiaozi, only sixteen merchant houses were allowed to issue it, making it a private-order currency. This helped extend the use of the notes by increasing their worth, but eventually the jiaozi depreciated again, so Xue Tian, a Chengdu prefect, reinstated it as a public order currency