Stockholms Banco issued the first European banknotes in 1661.
The Swedish bank, also called Palmstruch’s Bank, was founded in Stockholm in 1657 by Johan Palmstruch. Its paper notes, known as kreditivsedlar, were introduced when the bank struggled to balance short-term deposits with longer-term loans. They represented a promise that the holder could receive payment in metal and were designed to make large transactions easier.
The notes were especially practical in Sweden because copper daler coins were extremely large and heavy. In 1660, the copper content of the coins was reduced, prompting depositors to demand the return of older, more valuable coins. With insufficient metal available, the bank turned to transferable paper credit notes. The first issue came in denominations of 5, 25, 100 and 1,000 copper daler.
The experiment ultimately failed: excessive lending and note issuance left Stockholms Banco unable to redeem all its notes. It ceased operations in 1664 and was liquidated in 1667. Its successor, founded in 1668, became Sveriges Riksbank. The dates in the wrong options often reflect later banking milestones, not the first European issue.