. In the ancient times wealth was measured by the amount of gold one possesses .However keeping it in ones house was unsafe so people invented different ways and means to safeguard it 

In the east the rich ones used to hide their treasures under the ground or in wall cavities . Unlike their eastern counterparts princes and rich persons in the west used the vaults of the goldsmiths and merchants of jewelries to keep their .treasures and took a receipt ( note ) against their deposits they could have their treasures back upon demand provided they present the note 

. On these notes were written the name of the person who deposited the money the amount and the name of the person who keeps that money and his willingness to pay the amount back upon demand 

To make it easier for both parties they started to issue these notes in small round figures to enable the money owner to use these notes as a way of payment provided he signed on its back these notes were thus used like money and .circulated between people before returning to the original issuer another time . Goldsmiths acted as bankers 

Some notes returned to the original issuer after a long period and some even didn't return at all and that was because people trust his ability to pay back . This prompted some bankers to issue notes of fixed amounts without even having the gold or silver equivalent deposited in their vaults . Thus the value of these notes surpassed the real value under their hands and that was the first appearance of paper money

 . Some banks issued a very large amount of notes and were therefore under the risk of not being able to pay and therefore lose trust

Therefore the government entrusted the issuing of paper money to the largest bank at the time . In England Pell Act eas decreed on 1844 and it is the first Bank Charter Act giving the right to one English bank to issue paper money that is considered legal

. The oldest paper money in the world was issued by the " Ming Dynasty " in China and it is kept now in the British museum