A £20 Ulster Bank banknote.Jiaozi (Song Dynasty), the world's earliest paper moneyThe first polymer banknote, the 1988 Australian $10 note
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Paper Money: World

A banknote (more commonly known as a bill in the United States and Canada) is a kind of currency, and under many jurisdictions is used as legal tender. With coins, banknotes make up the cash forms of all modern money. more...

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Coin Appraisals

With the exception of non-circulating high-value or precious metal commemorative issues, coins are generally used for lower valued monetary units, while banknotes are utilised for higher values.

Originally, the value of money was determined by the intrinsic value of the material the money was made of, such as silver or gold. However, carrying around a lot of precious metal was cumbersome and often dangerous. As an alternative, banknotes would be issued. In financial terms, a note is a promise to pay someone money. Banknotes were originally a promise to pay the bearer an amount of precious metal stored in a vault somewhere. In this way the stored value (usually in gold or silver coins) backing the banknote could transfer ownership in exchange for goods or services.

The ability to exchange a note for some other kind of value is called "convertibility". For example a US silver certificate from the early 20th century was "payable in silver on demand" from the Treasury. If a note is payable in demand for a fixed unit, it is said to be fully convertible to that unit. Limited convertibility occurs when there are restrictions in the time, place, manner or amount of exchange.

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See also...
Africa, Paper Money: World
Asia, Middle East, Paper Money: World
Australia, Oceania, Paper Money: World
Collections, Lots, Paper Money: World
Europe, Paper Money: World
North, Central America, Paper Money: World
Other, Paper Money: World
South America, Paper Money: World
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