Bank notes in the Ancient World

China did OTL.

You need a supply of something easily written on that is light and portable, as well as being reasonably durable. Egypt's a slght possibility if low grade papyrus is used. Theoretically Greek Ostrata (potsherds) could be used as well, but not as easily.
 
Silk was compact, valuable and widely traded. Because silk notes would retain ample intrinsic value, I think it would be more plausible (for the ancient world) than a straightforward fiat currency.
 
I think the concept of fiat money would not be too strange for the ancient Mediterranean.
Actually, Hellenistic Egypt made some shy foray to something that works like cheques.

The main problem is: Can I trust that somebody else will accept this currency? And estimate its value not too far below what it cost me?

And this seems doubtful.

Spreading its use and acceptance alone would not be the problem:
If we are talking of the 1st and 2nd centuries AD, the Roman army would be a great start for its large budget and its ubiquity. The army could force its large network of suppliers (farmers, blacksmiths, tentmakers etc.) to use their "bonds" - perhaps out of a temporary liquidity shortage. That would be twice as interesting since it would start the tradition of the military issuing money rather than the rulers.

But as an ancient craftsman or merchant I would ask myself two questions:

  • How hard is it to counterfeit these "bonds"?
  • How can I secure them from being stolen?

As to the second question: When somebody had take a journey or had to flee because of an approaching hostile army, they would often bury their coins with the hope to dig out the treasure when they come home. As many didn't, that's why we have so many fine ancient coin finds ...

But how do you do that with paper!??
So you would need a dense net of actual banks, which seems to far a step.

One option to solve both problems would be coins out of iron, with some embossment on it to make it hard to forge. But I'm still not too sure about the last point ...
 
Fiat money is mainly a question of trust. If the issuer is credible then it is plausible. Anytime when the ruler is considered divine would be a boost to the credibility of money. Going back to Pharaohs and Eastern despots like the kings of Persia, or Chinese emperors, or Islamic Caliphs, there were certainly plenty of examples.

The second criteria is a sophisticated bureaucracy to issue and keep track of fiat money. The Pharaoh may be universally revered, but if his servants were well known to be corrupt, incompetent, have a disorganized system of record keeping, then the people will not trust the institutions which manage this money.

Beyond the issue of trust there must be a demand for fiat money. Why add this complexity to a primitive financial system? There would have to be extraordinary commercial activity to warrant what amounts to a radical reform of familiar financial transactions.
 
The second criteria is a sophisticated bureaucracy to issue and keep track of fiat money.

Um, why? The whole concept of cash is truly undemanding in terms of organization.
As to the making of money and verification of authenticity, embossed gold is also quite complicated.

Beyond the issue of trust there must be a demand for fiat money. Why add this complexity to a primitive financial system?

As said, a broke Emperor (or military) will soon learn how nice it is to create more money when it comes in handy.

Anytime when the ruler is considered divine would be a boost to the credibility of money.

Perhaps. But it seems that the material and the actual inflation rate are more crucial.
 
Um, why? The whole concept of cash is truly undemanding in terms of organization.
As to the making of money and verification of authenticity, embossed gold is also quite complicated.

But gold is worth something (even without being actual currency). Paper money is only worth something because the person you're giving it to agrees the government's currency is superior to a piece of paper* with a doodle on it.

Not sure why it would be more difficult organizationally, so I agree - or at least don't disagree - there. Anti-counterfeit stuff is different than the actual "minting".

As said, a broke Emperor (or military) will soon learn how nice it is to create more money when it comes in handy.
And watch inflation soar so high it destroys the credibility of paper* money for goodness knows how long as its associated with that act. You won't be creating more money, you'll be debasing the currency only without the short term advantages.

*: I'm using "paper" to refer to anything not sufficiently valuable in itself to be useful, thus is only valuable because its accepted that it really is worth the same as a talent of silver (or whatever).
 
As said, a broke Emperor (or military) will soon learn how nice it is to create more money when it comes in handy.
China in the Middle Ages (don't want to look through my books for the exact date) had paper money that was fairly widely used. Then 1 or 2 of the stupider Emperors decided to do just this. Within 10 or 20 years people were refusing to accept the money and the whole idea collapsed.
Inflation is bad.
 
And watch inflation soar so high it destroys the credibility of paper* money for goodness knows how long as its associated with that act. You won't be creating more money, you'll be debasing the currency only without the short term advantages.

Didn't they do that anyway with metal coinage by debasing the currency in the literal sense of the word, mixing more and more base metal in until towards the end there was so little gold left in the coins that they were barely yellow in colour?

Personally, I would have though large scale adoption of paper currency would have to wait until the invention of the printing press, forging would be too easy before then.
 
And watch inflation soar so high it destroys the credibility of paper* money for goodness knows how long as its associated with that act. You won't be creating more money, you'll be debasing the currency only without the short term advantages.

Yes. This is exactly what I would expect Roman emperors to incur if they had had the opportunity.
 
Didn't they do that anyway with metal coinage by debasing the currency in the literal sense of the word, mixing more and more base metal in until towards the end there was so little gold left in the coins that they were barely yellow in colour?
England in the 10-12 century was particularly notorious for this practice. It was one of the many reasons it was a backwater, as no one wanted to trade with them.
 
Didn't they do that anyway with metal coinage by debasing the currency in the literal sense of the word, mixing more and more base metal in until towards the end there was so little gold left in the coins that they were barely yellow in colour?

Personally, I would have though large scale adoption of paper currency would have to wait until the invention of the printing press, forging would be too easy before then.

Correct. To give an example, the silver denarius of the late Roman Republic was pure silver (as pure as they could make it, anyway). By the time Rome fell, some five hundred years later, the denarius was .002% silver.

For paper currency, you don't need a printing press, but you do need some method to ensure that it's difficult to counterfeit. The Mongols used paper currency (backed by gold, not fiat); the Polos brought some back to Italy with them.
 
This might go astray from the headline of this thread,
but wouldn't iron imitations of coins make suitable fiat money?
I would imagine a skillful portrait engraved - which would make it hard to falsify.
Of course, the labour component of its production would be much costlier than for precious metal.
 
Has fiat currency ever succeeded in controlling inflation without the support of a reserve banking system though? By reserve banking system, I mean one that not only controls and at times manipulates the money supply, but also simply a store of specie.
Perhaps the biggest slave owners could begin paying some of their slaves on latifundia in scrip, and the practice could spread from there. Because the latifundia were virtually self-contained, both producers and consumers would have to accept the scrip.
 
Yes. This is exactly what I would expect Roman emperors to incur if they had had the opportunity.

That did happen. Due the size of the army need to hold the Rhine and no steady supply of silver, debasement and inflation was rampant. This directly led to several of the army coups of the empire.
 
Didn't they do that anyway with metal coinage by debasing the currency in the literal sense of the word, mixing more and more base metal in until towards the end there was so little gold left in the coins that they were barely yellow in colour?

Personally, I would have though large scale adoption of paper currency would have to wait until the invention of the printing press, forging would be too easy before then.

But that doesn't mean that gold coins are rejected entirely, just the debased ones. On the other hand, worthless paper will be seen as not even nominally currency - it'll just be paper with a doodle.
 
But that doesn't mean that gold coins are rejected entirely, just the debased ones. On the other hand, worthless paper will be seen as not even nominally currency - it'll just be paper with a doodle.

But then the gold's just based on it's perceived value, it could be argued that the bible was just doodles on paper but it can't be denied that it has value. Point is it can go either way, while gold is still a pure and malleable metal it doesn't have to be valuable. It could go the way of Persia and India where it was extremely valuable , or Songhai where salt was more valuable. Plus gold can be inflated too like when the Spanish brought back gold from the new world.
 
But then the gold's just based on it's perceived value, it could be argued that the bible was just doodles on paper but it can't be denied that it has value. Point is it can go either way, while gold is still a pure and malleable metal it doesn't have to be valuable. It could go the way of Persia and India where it was extremely valuable , or Songhai where salt was more valuable. Plus gold can be inflated too like when the Spanish brought back gold from the new world.

The point is that people acknowledged that gold had value even unrefined. The only basis for paper currency being valuable is that people agree that there is a difference between doodles on paper and official currency in the first place - as in, paper currency has to develop as something that is accepted as equal to something that is worth something (gold, salt, pepper - whatever, something that people will accept as a valuable item on its own merits rather than just because the government claims this piece of paper it is equivalent to a talent).
 
Didn't they do that anyway with metal coinage by debasing the currency in the literal sense of the word, mixing more and more base metal in until towards the end there was so little gold left in the coins that they were barely yellow in colour?

Personally, I would have though large scale adoption of paper currency would have to wait until the invention of the printing press, forging would be too easy before then.

They did do that, yes, and out of necessity. It lost its value and inflation went up horrendously. in the 5th century it was 2.1 billion denarii to buy bread. Their forays into England were motivated by lead and silver for their coins, and the acquisition of Dacia gave the Economy of Rome a further 30 or so years of life.
 
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