Paper Money - General

The first known paper money originated in China, where it was a technological side effect of the development of block printing. Paper money was relatively unknown in the West until Sweden issued banknotes in 1661. Prior to Swiss banknotes, the only mention of paper money in Europe was a brief mention from Marco Polo several centuries earlier.

Most paper money today is fiat currency, which means it is based on a promise by the issuing government that it will always be redeemable. Before the widespread adoption of this system, paper money was backed by either a gold or silver standard. In the United States, silver certificates circulated from 1878 to1964. These certificates were and still are legal tender, but until 1968, they could also be exchanged for silver $1 coins.

An interesting trend in paper money has been the evolution of anti- counterfeiting techniques. Although paper money was originally considered very challenging to falsify, this changed as printing methods became more accessible. There is an astonishing plethora of security features present on various paper currencies worldwide. One of the latest trends is to replace the paper in the money with a plastic polymer, which lasts much longer and is much more difficult to counterfeit, although it is somewhat more expensive to produce upfront.

Quick Facts

• In the '30s, a $100,000 gold certificate was issued to facilitate the transfer of money between American Federal Reserve banks. Adjusted for inflation, that bill would be worth just shy of $1.75 million today
• Although Sweden is credited with formally introducing paper money to the West, they are also likely to be among the first nations to abandon it. Many of Sweden's leading banks offer limited cash transactions
• The most expensive paper money ever sold at auction is the Grand Watermelon, a $1,000 Treasury note that sold for a record $3.29 million in 2014