Paper Money


DEFINITION of 'Paper Money'

A country's official, paper currency that is circulated for transaction-related purposes. The printing of paper money is typically regulated by a country's central bank/treasury in order to keep the flow of money in line with monetary policy. Paper money tends to be updated with new versions that contain security features that seek to make it more difficult for counterfeiters to create illegal copies.


The first recorded use of paper money was believed to be in China during the 7th century A.D. as a means of reducing the need to carry heavy and cumbersome strings of metallic coins to conduct transactions. Similar to making a deposit at a modern bank, individuals would transfer their coins to a trustworthy party and then receive a note denoting how much money they had deposited. The note could then be redeemed for currency at a later date.

  1. Currency

    Currency is a generally accepted form of money, including coins ...
  2. Fiat Money

    Currency that a government has declared to be legal tender, but ...
  3. Notgeld

    A German term that means "emergency money." Notgeld denotes a ...
  4. U.S. Bureau Of Engraving And Printing ...

    A U.S. government agency responsible for printing the paper currency, ...
  5. Worn Currency

    Currency notes that are torn, damaged or badly soiled. Banks ...
  6. Hard Money

    1. Funding by a government or organization that is repetitive, ...
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  1. Who decides to print money in Russia?

    The Central Bank of the Russian Federation (CBRF), like its peers in most countries, is the governmental entity responsible ... Read Full Answer >>
  2. Who decides when to print money in India?

    The Reserve Bank of India, or RBI, manages currency in India. The bank's additional responsibilities include regulating the ... Read Full Answer >>
  3. How is the Federal Reserve audited?

    Contrary to conventional wisdom, the Federal Reserve is extensively audited. Politicians on the left and right of a populist ... Read Full Answer >>
  4. Who decides when to print money in the US?

    The U.S. Treasury decides to print money in the United States as it owns and operates printing presses. However, the Federal ... Read Full Answer >>
  5. How can the federal reserve increase aggregate demand?

    The Federal Reserve can increase aggregate demand in indirect ways by lowering interest rates. Aggregate demand is a measure ... Read Full Answer >>
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