Flying cash

Flying cash (Chinese: 飛錢), or Feiqian, was a type of paper negotiable instrument used during China's Song dynasty invented by merchants but adopted by the state. Its name came from their ability to transfer cash across vast distances without physically transporting it. It is a precursor to true banknotes which appeared during the Song dynasty.

According to the New Book of Tang, in the year 804, merchants were using flying cash. A Tang dynasty tax reform that allowed for the partial acceptance of taxes in money increased demand for copper cash coins, leading to a shortage from the years 805 to 820; this was a serious hindrance to everyday business. Concerned that merchants would remove cash coins from the capital to circulate, the dynasty ordered local governments to set up monetary systems based on silk, other fabrics, and daily items, akin to a barter system. This in turn hampered long-distance trade, hurting the national economy.

Originally the government of the Tang dynasty was less than receptive to the idea of bills of exchange and had attempted banning them on multiple occasions, but in 812 flying cash were officially accepted as a valid means of exchange. After the government had accepted these bills, the supervision of flying cash was handled by the Ministry of Revenue, the Tax Bureau, and the Salt Monopoly Bureau. The state began printing their own notes. Flying cash was a particular benefit to tea merchants, who helped improve the trade between the capital and the regions. Flying cash would remain in use until the early period of the Song dynasty.