Where did the first clearing houses originate according to banking legend?

The first clearing houses are said to have originated in coffee shops in London during the 17th century. This practice arose among merchants and bankers who needed a convenient place to settle transactions and debts. The bustling environment of the coffee shop provided the perfect informal setting for these business dealings, allowing merchants to meet, negotiate, and exchange promissory notes. This innovative arrangement was essential for the development of an efficient payment system, as it laid the groundwork for the modern concept of clearing houses, where financial institutions settle their transactions with one another. The association between coffee shops and the inception of this financial practice reflects how informal environments can lead to significant advancements in trade and banking structures.