Yuan dynasty

In 1260, the first year of Kublai Khan's rule, he issued two different Jiaochao notes. The first in July was backed by silk but was unsuccessful. The second was in October which used the silver standard.^[1]: 37 It was the first paper currency to be used as the predominant circulating medium in the history of China.^[2] The primary press was the Imperial Mint established in 1260, probably in Yanjing. It was certainly located in Khanbaliq after that city was established the same decade. Regional capitals were sometimes authorized to print money as well. The money of the various eras of the Yuan were also separately known, as the Zhongtong notes and Zhiyuan notes of the reign of Kublai Khan.^[3] They too suffered from devaluation and hyperinflation. In 1350 the final series of banknotes, the Zhizheng Jiaochao (至正交鈔) was issued. Unlike earlier notes, this was a fiat currency and was widely rejected.^{[1]: 35–76}

Jiaochao was described by the a number of foreign visitors, including Rustichello in his account of the travels of the Venetian Marco Polo,^[4] by William of Rubruck, and by Ibn Battuta.^[5]

The people of China do not do business for dinars and dirhams. In their country all the gold and silver they acquire they melt down into ingots, as we have said. They buy and sell with pieces of paper the size of the palm of the hand which are stamped with the Sultan's stamp. Twenty-five such pieces are called balisht, which is the same as dinar among us. If these pieces of paper become tattered from handling they take them to a house which is like our mint and receive new ones instead. The new pieces are not given against payment of any kind, for those in charge of this work receive regular salaries from the Sultan. The amir in charge of that house is one of the most important. If anyone goes to the bazaar with a silver dirham or a dinar intending to buy something with it, it is not accepted and he is disregarded until he pays with a balisht and buys what he wants.^[6]

— Ibn Battuta

Ilkhanate

Later in 1294, in order to control the treasury, Gaykhatu of the Ilkhanate in Persia attempted to introduce paper money in his khanate, which imitated the notes issued by the Yuan dynasty so closely that they even had Chinese words printed on them. However, the experiment proved to be a complete failure, and Gaykhatu was assassinated shortly afterward.^[7]