Banknote

Banknotes, or paper money, are a form of currency issued by a central bank or monetary authority. They function as legal tender—the officially recognized means of payment within the issuing country—and as a widely accepted medium of exchange, a store of value, and a unit of account. Modern notes are liabilities of the issuing institution and are guaranteed by the state; they are not promises to convert into a fixed amount of commodity, but a promise to honor their face value in the national economy.

The concept originated in ancient and medieval times with notes used by merchants and state treasuries. The first banknotes emerged in imperial China, and later European institutions such as central banks issued notes starting in the 17th and 18th centuries. Since then, banknotes have become a principal form of physical money in most countries, often with a distinctive design reflecting national identity, culture, and history.

Security and design features include watermarks, security threads, holograms, microprinting, color-shifting ink, and ultraviolet-visible elements. Banknotes also carry serial numbers, portraits, numerals, and tactile features to aid accessibility. Production typically uses cotton-based substrate, linen, or polymer films; polymer notes are increasingly common for longer durability. Denominations vary by country, sometimes across multiple series, and notes may be withdrawn or demonetized according to monetary policy and replacement cycles.

Despite growing digital payments, banknotes remain a core component of many economies, providing anonymity, resilience in outages, and a physical means of payment.