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.
The creation of the flying cash happened after a tax reform that allowed for the partial acceptance of taxes in money, which had increased the demand for currency which scared the government that merchants would remove cash coins from the capital to circulate so they ordered the local governments to set up monetary systems based on silk, other fabrics, and daily items akin to barter which hampered long-distance trade in the Tang dynasty and harmed the national economy.
[5] Under the Zhece policy Chinese merchants were paid in salt certificates in exchange for supplying the frontier armies directly as opposed to transporting government provisions to them.
[citation needed] It was not until the Song dynasty and subsequent Jin occupation that paper money was officially established as a legal tender.
Eventually, the Song Dynasty began to issue more notes to pay its bills- a practice that ultimately contributed to runaway inflation.