The bogus bills were being produced in an apartment mostly with an inkjet printer. When the RCMP arrived to raid the apartment, the process of manufacturing the bills was not yet completed, said Sgt. Tony Farahbakhchian or the E Division Federal Commercial Crime Section.

“He didn’t quite have the finished product yet,” he said.

According to The Province, the bills had been printed three to a sheet on one side only and a watermark and puzzle number were missing. Security features such as security threads, foil strips and holographic stickers had also not been added.

Farahbakhchian told The Province that the quality of the notes varied, but overall they were average reproductions.

He also urged the public to pay close attention to their banknotes and to be aware of the security features, especially during the holiday season when counterfeit money can be easier to spread due to busy stores and the amount of money being exchanged.

Though the Bank of Canada introduced a new, more secure, polymer $100 bill in November, these fakes were modeled after the old series, which is still in active circulation.

Trevor Frers, from the Bank of Canada, applauded the raid.

“For the RCMP to seize over $1 million in counterfeit notes before they enter circulation, that’s a huge victory against counterfeiting,” Frers said.

According to RCMP, The Province reports, the overall passing of counterfeit bank notes has decreased since 2004 due to upgraded security features. The new polymer $100 note is expected to reduce counterfeiting even more and increase durability.

SOURCE:
The Province: “Cops Seize $1 Million In Fake Bills”

Hollywood icon Greta Garbo will be the new face of Sweden's 100-kronor banknote.

A new Swedish banknote series is embracing the “out with the old, in with the new” adage. Nineteenth century singer Jenny Lind, and famed scientist Carl Linnaeus will be among those making way for more contemporary celebrities such as Swedish poet Evert Taube and Hollywood icon Greta Garbo.

Other personalities to be featured on the new Swedish krona include author Astrid Lindgren, singer Birgit Nilsson and former United Nations secretary general Dag Hammarskjold. Legendary film director Ingmar Berman will be featured on a brand new 200-kronor denomination.

Sweden’s central bank – Sveriges Riksbank – says it chose “people who have made positive and important contributions to Sweden’s cultural heritage during the 20th century.” The figures chosen were also “popular with the general public and also well-known internationally.”

The new faces won’t be the only adjustment to the banknotes, however. All of the new notes will be equipped with a new security feature known as “Spark” – a device that allows the banknote’s colour to shift when tilted and includes magnetic pigments in the dye that creates an image in certain light.

Higher denominations – 100, 200, 500 & 1,000 – will have an addition feature called “Motion” which is a window thread embedded into the banknote paper, giving an impression of movement when the banknote is titled. This feature currently exists on the most recent version of the 1,000-krona banknote.

Changes to the banknotes were crucial, says the central bank.

“Banknotes must be difficult to counterfeit,” they say in a question and answer segment on their website regarding the changes to the currency. “The current banknotes were designed 25 years ago, and we need to equip them with new security features. The aim is that Sweden will continue to have an effective protection against banknote forgery.”

All six new banknotes will be introduced into circulation around 2014-15.

SOURCES
Edmonton Journal: “Garbo Among Famous Faces To Adorn Swedish Banknotes”
Sveriges Riksbank: “Questions And Answers – New Banknote And Coin Series”

“The notes are a very high quality,” Australian Federal Police (AFP) commander David Steward told the Sydney Morning Herald.

“I do want to just encourage people to take care when they’re using ATMs particularly and they’re coming across $50 notes.”

The fake bills were being produced on three large commercial printing machines, which the AFP also seized in the raid. The most predominate bill in production on these machines was the $50 bill.

Currently, the Australian $50 bill has an abundance of security features to help prevent counterfeiting, including:

- A clear window has a stylised version of the Southern Cross printed in it, along with embossing of the number ’50′ (both can be seen from either side of the banknote);

- When the banknote is held to the light, a seven pointed star within a circle is formed by four points on one side of the banknote combining perfectly with three points on the other side.

- When the banknote is held to the light also, an image of the Australian Coat of Arms can be seen under other printing;

- The words ‘FIFTY DOLLARS’ are microprinted and can be seen with the aid of a magnifying glass;

- Slightly raised printing that can be felt with the fingers is used for the portraits and other major design elements;

- Intricate multi-coloured fine-line patterns and images appear on each side.

- The serial number of each banknote is printed twice, one in blue and one in black, on the back of the banknote.
A different font is used for each serial number. The alpha prefix of two letters is followed by two numerals representing the year of the production, followed by a further six numerals. Under ultra-violet light, the serial numbers fluoresce;

- Under ultra-violet light, a patch showing the number ’50′ becomes visible on the back of the banknote.

The Reserve Bank of Australia (RBA) says one sure fire way to detect the recent influx of fake $50 notes is to check the southern cross on the translucent window. Unlike an authentic $50 bill, the cross can be scratched with your fingernails. The fake notes are also softer and lighter than the real ones.

SOURCES:

Sydney Morning Herald: “Don’t Bank on Fake Money, AFP Says”

Reserve Bank of Australia: “The Australian $50 Banknote”

To date, Czech authorities have already seized 5,245 banknotes varying in denomination and value, but the increase doesn’t necessarily translate to an increase in counterfeit notes throughout the country. According to Pavel Zúbek, spokesman for the Czech National Bank (ČNB), the increase in seized notes means police forces are conducting more successful investigations.

“Forgery statistics are usually influenced by successful police activities against counterfeiters,” Zúbek told The Prague Post, also pointing out that police completed “two big operations” over the past summer.

The counterfeit notes seized this year have ranged from US banknotes, to Euro banknotes, as well as Czech banknotes.

Czech banknotes contain many security features to prevent counterfeiting such as security fibres, printed areas visible only under ultraviolet light, colour-shifting ink and iridescent stripes.

The newest versions of the 500, 1,000, 2,000 and 5,000 Kč notes also have a windowed thread in the center, adding a special effect known as POLE that is visible only with a special devices available to businesses that handle cash.

The ČNB said the general public can also help cut down on counterfeit circulation by being aware of these security features, and is urging people to be more careful when accepting banknotes.

SOURCE:
The Prague Post: “Seizure of Forged Bank Notes On The Rise”

How widespread is counterfeiting?

At any given time, some $200 million in bogus U.S. bills is in circulation worldwide, authorities say. About $60 million of those fakes circulates through the U.S. each year. Counterfeiting represents only a tiny fraction of the $800 billion in circulation, but it can be a nightmare for merchants or consumers who end up with the phony bills, because counterfeits can’t be exchanged for the genuine article. “It’s like a hot potato,” says Secret Service agent Bill Leege. “Whoever’s stuck with it is stuck with it.” In 2005, counterfeiters in Washington, D.C., laundered $3,900 through the Amen Gift Shop’s Western Union terminal, paying for wire transfers with phony money and collecting real cash on the other end. Shopowner Nwaka Egbulem had to reimburse Western Union out of his own pocket and shuttered his business. “It was devastating,” he says.

How old a problem is this?

Older than U.S. currency itself. During the Revolutionary War, the British circulated counterfeit Continental dollars throughout the Colonies, aiming to mess up their economies. The effort was so successful that an object deemed to have no value was said to be “not worth a Continental.” After the Revolution, the U.S. government allowed private banks to issue their own notes, theoretically redeemable for gold or silver. But with hundreds of private currencies in circulation, it was virtually impossible to distinguish real notes from the fakes, and by some accounts, half the bills in circulation were bogus. During the Civil War, the Confederates circulated so many counterfeit notes from Northern banks that in 1865, Abraham Lincoln established the Secret Service to track them down. It was the beginning of a cat-and-mouse game that continues to this day.

Who are the players?

Until the advent of personal computers and printers, counterfeiting was dominated by skilled specialists backed by criminal organizations, which could afford engraving tools, special inks, and printing presses. The government countered them with technological advances, such as presses that printed black ink on the front of bills and green on the reverse—hence the term “greenbacks”—and highly detailed engraving. These days, lower-quality bills tend to be made by small-time criminals out for a quick buck. Instead of printing thousands of bills at a time, says Treasury official Ringan Doty, counterfeiters “just print enough to get them through the day.” Higher-quality fakes, known as supernotes, are produced mostly by regimes hostile to the U.S., which according to the State Department use government presses equipped with the latest technology.

Is it easy to produce fakes?

Too easy. Today’s counterfeiters can simply scan a bill into a computer and print out an accurate copy on a high-resolution printer. Even finding the right paper poses little problem. Since 1879, the U.S. Mint has used a proprietary blend of linen and cotton fibers produced solely by Crane Paper in Massachusetts. It’s virtually impossible for amateurs to duplicate, but counterfeiters can create reasonable facsimiles using high-rag-content paper. Such fakes are not hard to spot—as long as the person receiving the bill is paying attention. That’s why counterfeiters like to pass bad bills in dimly lit bars or during busy periods at fast-food restaurants. “When it’s lunchtime at McDonald’s and everyone is screaming for their Big Macs, it’s hard for an employee to check out every bill they’re handed,” says Thomas Farrell of the Secret Service.

Aren’t there machines that detect fakes?

Yes, but even they can be defeated by one popular counterfeiting technique. Counterfeiters have been bleaching $5 bills and superimposing Ben Franklin’s portrait and the $100 denomination on them. Melody Shimmel, a bank security expert in Florida, admits she’s been fooled by such fakes. “I’m an old teller from 35 years back,” she says, “and I can’t feel a difference.” About the only way to spot one is to hold the bill up to the light and look for the watermark. If it’s a portrait of Lincoln rather than Franklin, the bill is a phony. Always trying to stay ahead of the counterfeiters, the U.S. redesigns its bills every seven years or so. The new $100 note is the latest such effort, and it’s considered the most sophisticated paper money ever printed.

What’s so special about it?

The new C-note features ink that changes color when the bill is twisted, multicolored magnetic threads embedded in the paper, and images, including the Liberty Bell, that appear and disappear when the bill is turned this way and that. But criminals can still fake older designs. And passing them may be getting easier, ironically because the government has been so good at removing counterfeits from circulation that most people don’t expect to see bogus bills. “To some degree,” says Tom Ferguson of the U.S. Bureau of Engraving and Printing, “we’re a victim of our own success.”

The elaborately redesigned $100 bill won’t hit the streets until February 2011, but it’s already got people talking, both here and abroad. As the most-widely circulated bill in the world, the Benjamin is also the most counterfeited — thus the colorful and technically complex new bells and whistles. Here are some numerical facts and figures about the C-note:

11.8: The cost, in cents, to make each new $100 bill, up from 8 cents currently

650,000: Number of light-shifting “micro lenses” in the new 3-D security thread on each bill

$46 million: Estimated value of the government’s contract with Crane & Co., the Mass. company that makes the threads

89: Life span, in months, of the typical $100 bill

1996: The year of the $100 bill’s last redesign

1862: The year of the first $100 bill issued by the U.S. government

1914: The year Benjamin Franklin first appeared on the $100 bill

1:10,000: Ratio of counterfeit to legitimate U.S. currency notes in circulation, according a 2006 U.S. Treasury report

1:3: Ratio of counterfeit to legitimate U.S. currency notes in circulation during the Civil War

$45 million: The amount of counterfeit $100 bills, or “supernotes,” made by North Korea, according to a 2009 Congressional Research Service report

$200,000: The amount of counterfeit cash passed in New York City each week, according to one expert

6.5 billion: Number of $100 bills in circulation

66: Estimated percentage of C-notes circulating outside U.S. borders

25: Number of languages the Treasury is using to spread information about the new bills

$31.4 billion: Increase in the volume of $100 bills in circulation in 2009

4:10: The time on Independence Hall’s clock on the back of the $100 bill

SOURCES:
The Week: The Big Business of Fake Money”
The Week: “100 Bill Redesign By The Numbers”

“This year we have seen an increased number of counterfeit notes,” said Aboobaker Ismail, head of currency and protection of the Pretoria-based central bank. “We are extremely concerned about it but we are doing something.”

The bills being withdrawn are part of an old series printed before 2005, which is when a new series was introduced with added security features. The only distinguishing marks, however, are minor design differences.

Consumers have until May 31 to exchange the notes at commercial banks, though they can be exchanged at the Reserve Bank after that date.

With nearly 400,000 expected to visit South Africa in June for the world’s largest sporting event, the central bank is undergoing an extensive campaign to teach people about the difference between real and fake 200-rand notes.
Newspaper commercials, posters and brochures have all been printed as part
of the campaign.

Samantha Henkeman, spokeswoman for the South African Reserve Bank, says personal precaution will be a large part of the education campaign as well.

“The South African public is encouraged to re-familiarise themselves with the security features on South African banknotes and to examine them on receipt,” she says. “Do not hesitate or feel embarrassed about holding a banknote up to the light. Look, feel and tilt the banknotes to ascertain the security features.”

Though Ismali says they hope to not only withdraw the old series before June as well as “weed out” all counterfeits, some retailers are taking the extra precaution of not accepting any 200-rand note altogether.

The South African Gold Coin Exchange, which is licensed to sell the bullion discs stamped with the official 2010 World Cup logo, has also barred the use of all 200-rand notes at its stores countrywide from the end of this week.

South Africa will introduce new notes across all currency denominations with upgraded security and design features “in late 2012,” said Ismail. The denomination mix of 10-, 20-, 50-, 100- and 200-rand notes won’t change, he added.

SOURCES:
Business Week: “South Africa Fights Rand Counterfeits A Month Before World Cup”
Independent Online: “Old R200 Banknote Recalled”

New Jersey issued this six-pound note in 1761, during the French and Indian War. It warned "To counterfeit is Death," because counterfeiting was deemed a capital offense. Courtesy History.org

*This article is the first in a three-part series on counterfeiting.

The act of counterfeiting is as old as money itself. Plaguing ancient Rome, empirical China, newborn America, and many other nations over the past 2500 years, the illegal activity came hand in hand with the creation of money.

Even prior to the invention of coin and paper currency, counterfeiting was a popular form of trickery. In Prehispanic Mexico, for example, Cacao traders would extract the contents of the bean and substitute the valuable innards of the plant with soil.

In the ancient world, of course, currency was invented hundreds of years before these Mexican ruses. Real currency made its debut in the form of coins around 700 B.C. and counterfeiting soon followed. Coins had not yet been marked or etched with images or slogans, so reproducing coins out of less valuable metal was easy.

The problem became so severe in places like ancient Rome, that “it was considered treasonous and punishable by death if the perpetrator was caught. This was because many believed that anyone who disturbed the market with fake money was putting the nation’s economy and its general stability and strength in serious jeopardy.”

Those sentiments were echoed by the Chinese upon the invention of paper money, which appeared on the global currency scene during the Yuan Dynasty in the 13th Century. In order to prevent counterfeiting, “the Emperor ordered that the following be printed on all banknotes: ‘Counterfeiting shall be punished by death. Informers shall receive 250 taels of silver and the criminal’s property.’”

Throughout history, however, counterfeiting has not only come at the hands of criminals. The British government “produced large quantities of bogus assignats to undermine revolutionary France,” and helped the process of devaluating “Confederate paper money by printing it themselves and sending it to the South” in pre-revolution America to the point where Confederate banknotes were almost worthless.

By the end of the eighteenth century, counterfeiting was flourishing. During the Civil War, “one-third to one-half of the currency in circulation was counterfeit.”

Coin counterfeiting had become so advanced in the United States that “when the first federal coins were issued by the US government in the 1780s, they had the dies cut by an ex-counterfeiter in order to deter the practice.”

Paper money in the US was also being easily counterfeited because of merchants’ inexperience with the currency. One historian explains: “Rural colonists were not very familiar with paper money because their daily lives did not revolve around commercial transactions; furthermore, they had a deep prejudice against it because they did not regard it as ‘real’ money. Because merchants lacked familiarity with authentic paper money, they could be fooled by some surprisingly amateurish counterfeits.”

Though anti-counterfeiting measures were being developed throughout the world by the nineteenth century – particularly in America – counterfeiting continued.

One of the most professional cases of counterfeiting was carried out by the Germans in World War II who “had control of expert counterfeiters imprisoned in the Sachsenhausen concentration camp, and even manufactured very convincing paper, which can be more difficult to forge than a banknote’s appearance.”

The counterfeits produced by the Germans in the first half of the twentieth century were so good in fact that when The Bank of England managed to obtain some falsified British pounds, they said “the only way in which [the fake banknotes] differed from the real thing was that the real thing wasn’t as good.”

Today, thanks to modern advances in scanning and printing technology, counterfeiting paper banknotes is perhaps easier than ever. Because of this, security features are becoming an – if not the most – important part of banknote design.

In Part 2 of Counterfeiting: A Three-Part Series, we will take a look at the history of security features and identify how different security features have evolved over time to prevent counterfeiting.

SOURCES:
“History of Counterfeit Money”
“A Short History of Money”
“History of Counterfeiting”
“History of Counterfeiting”
“The History of Counterfeit in Russia”
“The Golden Age of Counterfeiting”
“History of Counterfeiting in Mexico”

Nearly 200,000 counterfeit euro20 banknotes were seized in the last six months says the European Central Bank

The European Central Bank (ECB) announced today that the number of fake euro banknotes seized in the last six months rose by eight per cent from the first half of the year.

“In the second half of 2009 a total of 447,000 counterfeit euro banknotes were withdrawn from circulation,” an ECB statement said.

Though the increase is significant, ECB officials say it is a step up from the first half of 2009, which saw a 17 per cent increase in seized counterfeit notes.

The most frequently forged bills were the euro20, which accounted for 47 per cent of the fakes, and the euro50, which accounted for 39 per cent.

The euro contains many security features that attempt to foil counterfeiters. Specific watermarks, security threads, hologram foil stripes & patches, iridescent stripes, and colour-shifting inks all play their part in deterring the reproduction of fake notes.

Though the ECB’s statement demonstrated concern at the growing ability to produce successful counterfeit euros, the Central Bank also remained steadfast in believing it was a manageable problem.

“When compared to the 12.8 billion genuine banknotes in circulation,” the ECB statement said, “the proportion of counterfeits is still very low.”

Nearly one million counterfeit euros were seized and withdrawn from circulation in 2009.

SOURCES:
Chicago Sun Times: “Amount of counterfeit euros up.”
“Fake euro seizures rise by 8%: ECB”

Experts believe 95 per cent of the security features were accurately reproduced in a recent seizure of counterfeit rupees.

India will put together a ‘financial terror dossier’ this week in an attempt to garner international support in pressuring Pakistan to immobilize a booming counterfeit currency ring that exports bogus Indian banknotes into the country.

Since the attacks in Mumbai last November, India has been aggressively building a number of cases against the neighboring Pakistan, including a case against counterfeiting.

“There is enough evidence with us of Pakistan’s incriminating role in printing fake Indian currency notes and pumping it into India,” a senior intelligence official told DNA, an Indian news outlet.

Indian intelligence agencies such as the Central Bureau of Investigation believe there are multiple fake printing units throughout Pakistan, and reports indicate that the country has been importing currency paper and ink in massive quantities from European countries for diversion into counterfeit notes.

Authorities, bank officials, and experts have been shocked by the amazing accuracy in the reproduced rupees. Recently seized notes could not be detected as counterfeit by the naked eye.

Currency specialists say the security features on these counterfeit notes have been copied with over 95 per cent accuracy, including – among others – the light and shade effect and multi-directional lines in the watermark of the Mahatma Gandhi series.

Earlier this month, the Reserve Bank of India announced it would begin a trial period of introducing low-denomination polymer banknotes in an attempt to combat counterfeiting (Read: India To Begin Trial Period for Polymer Banknotes).

SOURCES:
DNA: “India gears up to tackle ‘financial terror’”
Reserve Bank of India: Security Features

The world's largest banknote: a 1998 100,000 peso note roughly the size of a sheet of legal paper

With the US Mint launching the release of a new $1.00 coin in November, Time Magazine drafted this list of top-ten tidbits about money that may surprise you:

#1 – The Largest Banknote: Measuring in at roughly the size of a sheet of legal paper, the world’s largest single banknote is the 100,000-peso note created by the government of the Philippines in 1998. Designed to celebrate a century of independence from Spanish rule, the note was offered only to collectors, who could purchase one of the limited-edition notes for 180,000 pesos, or about $3,700.

#2 – One In A Million: The largest banknote ever issued by the Bank of England was the £1,000,000 note, issued in 1948 as a temporary measure during the postwar reconstruction in the Marshall Plan. Designed for use by the U.S. government only, the notes were canceled after just a few months, allowing very few to escape into private hands. But just because the notes are out of service doesn’t mean they’re valueless — in 2008, one of two known surviving notes fetched almost $120,000 at auction.

#3 – The World’s First ATM: It might just be the best idea to come to a man in the bathtub since Archimedes’ time. While taking a soak, inventor John Shepherd-Barron devised what is hailed as the world’s first automatic teller machine, although his claim to the title is a matter of dispute. He pitched the device to the British bank Barclays. It accepted immediately, and the first model was built and installed in London in 1967. Though the machine used PIN (personal identification number) codes, a concept Shepherd-Barron also claims to have invented, it was dependent on checks impregnated with the (slightly) radioactive isotope carbon 14 to initiate a withdrawal, as the magnetic coding for ATM cards had not yet been developed. One other difference from its ubiquitous modern counterpart: it didn’t charge a fee.

#4 – The Origins of $:No one knows the origin of the dollar sign, but the U.S. Bureau of Engraving and Printing has a pretty good guess. The government agency responsible for designing and printing all those crisp dollar bills says the design, originally used to denote Spanish and Mexican pesos, “P S ,” came to be written such that the S was on top of the the P. The symbol was widely used before the 1875 issue of the first U.S. paper dollar. And in case you never noticed, it doesn’t actually appear on U.S. currency at all.

#5 – You Can’t Take It With You: All bills eventually wear out. The smaller the value, the more often you use it — and the shorter its lifespan. A $1 bill lasts a measly 21 months, while a Ben Franklin can last more than seven years. Over that time, of course, owing to inflation, its value will decline — which is the perfect excuse to spend it quickly.

#6 – America’s Counterfeit Cops: Following the Civil War, counterfeit currency became such a rampant problem in the U.S. — more than a third of all bills were believed to be fakes — that the government was forced to act. In 1865, a special division of the Treasury Department was created to crack down on counterfeiting before it completely undermined the nation’s economic system. That agency still fights bogus money today, but it’s better known for its dark-suited agents and intimidating SUVs — it’s the United States Secret Service, which also protects the President and other top political leaders. President Abraham Lincoln authorized the Secret Service on April 14, 1865 (ironically, the day he was assassinated at Ford’s Theater); its mission expanded to full-time presidential protection following the assassination of President William McKinley in 1901. The 6,500-person agency was moved to the newly established Department of Homeland Security in 2002.

#7 – It’s All About The Elizabeths: From Australia to Trinidad and Tobago, Queen Elizabeth II’s portrait has graced the currencies of 33 different countries — more than that of any other individual. Canada was the first to use the British monarch’s image, in 1935, when it printed the 9-year-old Princess on its $20 notes. Over the years, 26 different portraits of Elizabeth have been used in the U.K. and its current and former colonies, dominions and territories — most of which were commissioned with the direct purpose of putting them on banknotes. However, some countries, such as Rhodesia (now Zimbabwe), Malta and Fiji, used already existing portraits. The Queen is frequently shown in formal crown-and-scepter attire, although Canada and Australia prefer to depict her in a plain dress and pearls. And while many countries update their currencies to reflect the Queen’s advancing age, others enjoy keeping her young. When Belize redesigned its currency in 1980, it selected a portrait that was already 20 years old.

#8 – Dirty Money:All money, it turns out, could stand to be laundered: the stuff is filthy. Studies show that a solid majority of U.S. bills are contaminated by cocaine. Drug traffickers often use coke-sullied hands to move cash, and many users roll bills into sniffing straws; the brushes and rollers in ATMs may distribute the nose candy through the rest of the money supply. (See the top 10 athlete drug busts.)

Also found on bills: fecal matter. A 2002 report in the Southern Medical Journal showed found pathogens — including staphylococcus — on 94% of dollar bills tested. Paper money can reportedly carry more germs than a household toilet. And bills are a hospitable environment for gross microbes: viruses and bacteria can live on most surfaces for about 48 hours, but paper money can reportedly transport a live flu virus for up to 17 days. It’s enough to make you switch to credit.

#9 – Inflation Nation:To deal with hyperinflation that reached the ludicrous level of 231 million % and saw the price for a loaf of bread hit 300 billion Zimbabwean dollars, Zimbabwe’s newly formed unity government — including bitter opponents President Robert Mugabe and Prime Minister Morgan Tsvangirai — issued a $100 trillion note in early January. (One hundred trillion, by the way, is a 1 with 14 zeroes — making the note the highest denomination in the world.)

Just weeks later, however, the leaders decided to back-burner the hugely devalued Zimbabwean dollar and began allowing people to do business in other currencies. The move managed to curb inflation for several months until a small uptick in July. One hopes some of those $100 trillion notes didn’t get spent all in one place.

#10 – The First Paper Money: Paper bills were first used by the Chinese, who started carrying folding money during the Tang Dynasty (A.D. 618-907) — mostly in the form of privately issued bills of credit or exchange notes — and used it for more than 500 years before the practice began to catch on in Europe in the 17th century. While it took another century or two for paper money to spread to the rest of the world, China was already going through a fairly advanced financial crisis: the production of paper notes had grown until their value plummeted, prompting inflation to soar. As a result, China eliminated paper money entirely in 1455 and wouldn’t adopt it again for several hundred years. Another not-so-well-known fact: the word cash was originally used to describe the type of round bronze coins with square holes commonly used in the Tang Dynasty, called kai-yuans.

SOURCE:
Time Magazine: Top 10 Things You Didn’t Know About Money