China was the first country in the world to use paper money.

China - Jiao Zi

China - Hui Zhi

The history of Jiaozi dates back to the Northern Song Dynasty (960-1127).
During this time, merchants in Chengdu distributed one of the earliest known paper money. The currency was called Jiaozi, a kind of printed-paper certificate, to replace the iron money. With the high circulation of the currency, the local government of Chengdu established the earliest administrative and savings bank known as the Office of Jiaozi. The word Jiaozi then began to be used as a general term for money. In 1023, the authority of the Song Dynasty issued official Jiaozi while banning private issuing.

Jiaozi was the first paper money not only in China but also around the world. Paper money proved popular in the later dynasties like the Yuan (1271-1368), Ming (1368-1644), and Qing (1644-1911), but it had never replaced the metal coins in circulation. The round coins with square holes continued to be used in China for more than two thousand years, until the late Qing Dynasty .

It was only in modern times that the large-scale issue of paper currency came into being.

Source China Culture.org

The Huizi issued in 1160, was the official banknote of the Chinese Southern Song Dynasty. It has the highest amount of issuance among various banknote types during the Song Dynasty.