The medieval crusades gave rise to various orders of religious knights who took monastic vows of chastity and poverty, as well as oaths fight the enemy. The Knights Templar was among the most prominent of these orders. New initiates were required to donate all of their wealth to the Templar order, which also received money from royalty. The Order consequently became extremely wealthy and began engaging in the practice of banking and money-lending. Some have also claimed that the Templars discovered the ancient ruin of King Solomon's temple in 1127, where they claimed the Ark of the Covenant along with a vast hoard of bullion and other treasures. In any case, the Templars had more than ample funds to begin their enterprises.

At this point in history, Christians were forbidden to engage in the practice of lending money and charging interest. However, the Vatican had evidently given the Templars free reign to do as they pleased, and the Templar Order avoided charges of usury easily enough by loaning out money, charging interest, and then calling the interest "rent." Since the total number of deposits and withdrawals did not occur simultaneously, the Templars were able to loan out bank notes in excess of the actual underlying hard assets in reserve, effectively creating money and credit out of thin-air, as central banks around the world continue to do today.

The Templars had ample opportunity to do business in the environment of their day. Medieval merchants and travellers whose long journeys were plagued by bandits and raiders naturally preferred to put their gold, silver, and other hard assets in the care of the Templars, who then gave their depositors redeemable promissory notes written in cipher codes. The notes issued by the Templars were in such popular demand that they loaned large amounts of money not only to merchants, but also to as kings and bishops.

Not surprisingly, the Templars eventually grew too powerful and influential for the liking of either the Vatican or the Crown. King Phillip IV and Pope Clement V consequently formed a plan to destroy the Templars, and on on Friday, October 13 of 1307, the Templars were rounded up by the thousands and charged with all manner of atrocities, heresies, and diabolical practices. One of the most famous accusations was that the Templars were devil-worshippers who conducted seances using mummified severed heads called "Baphomets." The Templars did in fact possess a number of severed heads which they claimed were used as reliquaries, but little else is known about what really took place in Templar rites since the confessions extracted under torture tended to vary from Templar to Templar.

Finally, after years of trial and inquisition, the Templar Grand Master Jacques de Molay refused an offer to submit to the Church, and was consequently taken to an island to be burnt at the stake. At the scene of his ghastly death, De Molay declared his innocence and cursed both the King and the Pope, declaring that the Pope would die before forty days, and that that King would die within the year. Both of these prophecies came true, with the Pope dying in April and the King in November.

Although the Order was destroyed, the Templars have remained a subject of fascination throughout history. Due to their financial innovations, the Templars are sometimes credited with providing the model that laid the foundations for modern economic and banking systems.