When paper money was issued in America, it became the first authorized paper money to be issued by a government in the Western world.
Beginning in the middle of 1775, the Continental Congress issued paper money with which to purchase war supplies from foreign countries. The Congress asked the states to redeem the currency, but most states were preoccupied with the need to support their own military activities; consequently, taxes were neglected.
The English forbade the circulation of the money in areas they occupied and attempted to undermine public confidence in it in other areas, often counterfeiting the money.
By 1780, economic circumstances had combined to reduce Continental Currency to one-fortieth of its original face value and the Continental Congress ceased printing it.