DescriptionPaper money began in Canada in the 17th century with the “playing card money.” After circulating for several decades almost all of them were redeemed. The colonial finances were somewhat rudimentary for quite a while. There was a long token period, with private banks promoting speculative issues of metal and paper private money. When the government started to get involved in national finances after Confederation, paper money tended to follow the American model, with the equivalent of “fractional currency,” large size notes, then small size notes.Aside from China, other governments started using circulating “banknotes” starting in the 17th century AD. The practice became general in the 19th century. In the 20th century value of paper money in circulation far surpassed the value of coinage. In the 21st century paper money is fading and credit transactions are growing.Paper money, meaning the promise of a government to pay a set amount, and the paper promise allowed to circulate at will, was probably first used in China in the 12th century AD. At that time the merchants and governments of Europe were just writing letters to each other about what they owed.
