Banknotes trace their origins to seventh-century China, representing a significant development in monetary systems. Rather than having inherent value, these pieces of paper function as promises to pay a specific amount. This concept is reflected in their initial Western name, 'promissory notes,' which emphasizes their role as financial instruments rather than physical commodities.

The introduction of banknotes marked a transformation in economic transactions, allowing for easier trade and commerce. As a result, they became a crucial part of modern financial systems, facilitating both local and international exchanges while relying on the trust and credibility of the issuing authorities.