A Bank Note is a piece of paper money which is issued by a bank. In the UK, all banknotes are issued by the Bank of England which is the legally recognised tender.
History of Bank Notes
Before the advent of banknotes, money had to have intrinsic value. For example, people would pay for things with gold coins. Cut a gold coin in half and it is worth half as much. This was inconvenient because it meant carrying around heavy gold coins. As the banking system developed, banks would issue notes bearing a message such as:
I promise to pay the bearer on demand the sum of £10.
What this means is that if you took the note to the issuing bank, they would give you £10 worth of Gold. Because people trusted in the banking system. Banknotes were frequently changed hands with less and fewer people wanting to get their money in an intrinsic form. Therefore, notes became to be valued the same as gold. These notes were a much more convenient form of money.
Bank Notes are now issued solely by the Bank of England.
Current Bank Notes in the UK
£5 note (Elizabeth Fry prison reformer)
£10 note (Charles Darwin – evolutionary biologist)
Actual note size: 142mm x 75mm (approx.)
New-style £20 note (Adam Smith (famous economist)
Actual note size: 149mm x 80mm (approx.)
£50 note (Sir John Houblon – The first governor of the Bank of England)
Actual note size: 156mm x 85mm (approx.)