later, after coins had been used for hundreds of years, paper money started out as a promise to pay in coin, much like an "i.o.u." note. the first true paper money was used in china in the 10th century ad. paper money was also printed in sweden between 1660 and 1664. both times, it did not work well, and had to be stopped because the banks kept running out of coins to pay on the notes. massachusetts bay colony printed paper money in the 1690s. this time, the use became more common.