Which Swedish institution issued Europe’s first banknotes in 1661?

Stockholms Banco issued Europe’s first banknotes in 1661.

The Swedish bank was founded in Stockholm in 1657 by Johan Palmstruch, with royal authorization. It accepted deposits and made loans, but it soon faced a problem familiar in banking history: it issued more credit notes than its metal reserves could support. When depositors demanded repayment, the bank could not meet all claims.

In 1661, Stockholms Banco began issuing credit notes that circulated as paper money. These notes are often described as Europe’s first banknotes, although earlier forms of paper money had appeared in China. The Swedish experiment therefore marks an important European step in the development of modern currency.

The bank failed in 1668 after a run and was taken over by the Swedish authorities. Its successor, the Riksens Ständers Bank, later became Sveriges Riksbank. That later institution is commonly identified as the world’s oldest surviving central bank, but it was not the same organization as Stockholms Banco.