Creation of the Assignation Bank and Russia's first paper money

On 18/29 December 1768 (Old Style/New Style), Catherine II issued a decree creating the Assignation Bank (Assignatsionny Bank), tasked with issuing Russia's first government-backed paper currency, known as assignats. Prior to this, the Russian economy relied entirely on heavy copper and silver coinage, which was cumbersome for large transactions and long-distance trade, especially amid the financial pressures of ongoing wars.

The introduction of paper banknotes represented a major modernization of Russian public finance, aligning the empire with financial innovations already underway in Western Europe. The notes were initially exchangeable for copper coin and were intended to facilitate government spending, particularly military expenditures, and to ease commerce across the vast Russian territories.

While the system later suffered from over-issuance and inflation, particularly during subsequent wars, the establishment of the Assignation Bank marked a foundational moment in Russian economic history, introducing paper money to the empire for the first time and laying groundwork for the modern Russian banking and monetary system. It reflected Catherine's broader interest in economic modernization, influenced by Enlightenment thinking on statecraft and political economy, and her willingness to adopt Western financial technologies to strengthen imperial administration and military capacity.