Banknotes

Banknotes are portable, rectangular pieces of paper or polymer that serve as the primary physical form of a country's currency. They represent a claim on the issuing authority, typically a central bank or monetary authority, and function as legal tender for goods and services within the issuing jurisdiction. Banknotes are issued to complement coins and electronic money and to support monetary policy by providing a store of value and a unit of account.

Historically, banknotes originated as promissory receipts in medieval banking and evolved into widely used currency in the 17th to 20th centuries. Early banknotes often promised convertibility into precious metals; in modern systems most are fiat money with no guarantee of convertibility. Today, central banks issue notes and regulate their distribution, usually with a defined set of denominations and security standards. Notes circulate along with coins and digital payments and may be used beyond borders only where accepted or pegged to exchange rates.

Design and security features include portraits, numerals, and state imagery, as well as color-shifting inks, watermarks, security threads, microprinting, holograms, and tactile elements for the visually impaired. Materials vary; many countries now prefer polymer notes for durability and counterfeit resistance, while others use cotton-based paper. Counterfeiting remains a concern, prompting ongoing upgrades to design and verification tools for both the public and machines.

Banknotes play a key role in a monetary system as a medium of exchange, a store of value, and a unit of account, but they coexist with cashless payments and other forms of fiduciary money. The specific characteristics of banknotes—such as denominations, security features, and design—are determined by national policy and cultural factors.