Although metal currency dominated the classical era, medieval China ushered in the next major leap – the emergence of paper currency. In the Tang Dynasty (618-907), merchants used promissory notes in the form of “flying money” to avoid long-distance transportation of heavy copper coins. This system evolved into official paper currency during the Song and Yuan dynasties, allowing China to use paper currency 500 years earlier. However, excessive issuance led to inflation, and by 1455, the Ming Dynasty had abandoned paper currency due to severe devaluation. Although paper currency was not introduced to Europe until centuries later, China’s experience highlights the efficiency and risks of similar legal tender. Meanwhile, in 12th century England, the Royal Treasury used tally sticks to record debts and taxes as a form of credit currency. These wooden sticks were circulated as “accounting currency” for transactions with the royal family and were still in use until the 19th century. These innovations mark the shift of currency towards abstract forms – written tools and credit records – laying the foundation for modern banking.
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