China was the first country to use paper money

Explanation

During the Tang Dynasty (618-907 AD), merchants used "flying cash" (feiqian), private deposit receipts that allowed value to be transferred over long distances without carrying heavy coins. The Song Dynasty (960-1279 AD) then issued the first true government-backed paper currency, known as Jiaozi, around 1024. Paper money only reached Europe centuries later. The first European banknotes appeared in Sweden in 1661.