Editing Banknote (section)

{{Short description|Paper money issued by a bank}}
{{Use dmy dates|date=November 2020}}
{{Numismatics}}
{{Securities}}

A '''banknote''' or '''bank note'''<ref>{{cite web |website=Collins |url=https://www.collinsdictionary.com/dictionary/english/bank-note |access-date={{date|2025-1-22}} |title=bank note}}</ref>{{snd}}also called a '''bill''' ([[North American English]]) or simply a '''note'''{{snd}}is a type of [[paper money]] that is made and distributed ("issued") by a [[bank of issue]], payable to the bearer on demand. Banknotes were originally issued by [[commercial bank]]s, which were legally required to [[Redemption value|redeem]] the notes for [[legal tender]] (usually gold or silver coin) when presented to the chief cashier of the originating bank. These commercial banknotes only traded at face value in the market served by the issuing bank.{{sfnp|Atack|Passell|1994|p=469}} Commercial banknotes have primarily been replaced by national banknotes issued by [[central bank]]s or [[monetary authority|monetary authorities]]. 

By extension, the word "banknote" is sometimes used (including by collectors) to refer more generally to paper money, but in a strict sense notes that have not been issued by banks, e.g. [[government note]]s, are not banknotes.<ref>{{cite web |website=Merriam-Webster |url=https://www.merriam-webster.com/dictionary/banknote |access-date={{date|2025-1-22}} |title=banknote}}</ref>{{Better source needed|reason=The current source is insufficiently reliable ([[WP:NOTRS]]). See also [[Wikipedia:Dictionaries as sources]]|date=February 2025}}

National banknotes are often, but not always, [[legal tender]], meaning that courts of law are required to recognize them as satisfactory payment of money [[debt]]s.<ref>{{cite web
 |url          = http://www.royalmint.com/Corporate/policies/legal_tender_guidelines.aspx
 |title        = Legal Tender Guidelines
 |access-date   = 2007-09-02
 |publisher    = British Royal Mint
 |archive-url  = https://web.archive.org/web/20081217182521/http://www.royalmint.com/corporate/policies/legal_tender_guidelines.aspx
 |archive-date = 17 December 2008
 |url-status   = dead}}</ref> Historically, banks sought to ensure that they could always pay customers in [[coin]]s when they presented banknotes for payment. This practice of "backing" notes with something of substance is the basis for the history of [[central bank]]s backing their currencies in gold or silver. Today, most national currencies have no backing in [[precious metal]]s or commodities and have value only by [[fiat money|fiat]]. With the exception of non-circulating high-value or precious metal issues, [[coin]]s are used for lower valued monetary units, while banknotes are used for higher values.