From the Colonial Scrip page on Wikipedia:

Colonial Scrip was not backed by gold or silver and therefore the Colonies could control its purchasing power. This was a revolutionary concept in economics, because the conventional European mercantilist system of money required governments to borrow from banks and pay interest for those loans, as gold and silver were the only regarded forms of money. This is known as the debt-based money system, where banknotes are “bills of debt.” Colonial Scrip, however, were “bills of credit” created by the government, based on the credit of that government, and this meant that there was no interest to pay for the introduction of money. This went a considerable way towards defraying the expense of the Colonial governments and in maintaining prosperity. The Governments charged low interest when it loaned out this paper money to its citizens, with land as collateral, and this interest income lowered the tax burden on the people, contributing to prosperity.

The currency was born when a lack of gold and silver in the Colonies made trade hard to conduct, and a barter system prevailed. One by one, the Colonies began to issue their own paper money to serve as a medium of exchange to make trade vibrant. The Governments could then retire excess notes out of circulation by taxing the people, helping some Colonies generally avoid inflation. Each Colony had its own currency and some were better managed than others. It was banned by English Parliament in the Currency Act after Benjamin Franklin had explained the benefits of this currency to the British Board of Trade. Outlawing the circulating medium caused a depression in the Colonies, and Franklin and many others believed it to be the true cause of the American Revolution.