In the modern world, the definition of a banknote is a legal tender to negotiate promissory note, made by a bank or other authorized institutes, payable to the bearer of demand.
It would be interesting to know the facts of the genesis of Banknotes. Tunisia claims to issue banknotes on parchment before 146 BC. One more contemporary evidence of banknote is found in the Han dynasty of China in 118 BC which was prepared on leather. Another evidence is found from Rome in 57 AD where the promissory note is made of lightweight substance.
The perception of paper currency has evolved over a period of time. Initially, money was based on the standard weights of precious metals.
Paper money introduced as receipts for value held on account ‘value received’, and was not conflated with promissory sight bills which were issued with a promise to convert at a later date.
Full-fledged paper currency was developed by Tang dynasty in the 7th century. A more developed example of paper currency can be seen in the Song dynasty. The usage of paper currency at a larger extent happened during Yuan dynasty.
Marco Polo introduced banknotes in Europe during the 13th century. In the early 1800s, Napoleon also issued banknotes.
The given left side image is of ‘Jiaozi’ from Song dynasty which is one of the world’s earliest currency note.
Image Courtesy: Wikipedia