The first paper money

The first known paper money put into widespread circulation was created by the Tang Dynasty (618-907 A.D.) in China.

 

 

This 1380 Kuan note was made in China and is the oldest known bank note in existence. By 1455, after about 600 years, China abandoned its paper money experiment mainly due to hyperinflation. So many paper notes were created that they became utterly worthless.

The first paper currency issued by the Department of the Treasury were Demand Notes Series 1861. The original "Greenback" was created during the Lincoln Administration. It is considered by some to be a "fiat currency" because its value is not connected to gold or silver. The first series Greenback is exchangeable for a government bond that pays 6 per cent interest per annum. The Greenback came with a red seal.

 

The above image is a counterfeit 1862 note. It was printed on legitimate paper, but has no red seal. Therefore, it is counterfeit.