Paper currency was first developed in China in the Tang Dynasty during the 7th century and was later introduced in the Mongol Empire, Europe, and America. Paper money originated in two forms: drafts, which are receipts for value held on account, and “bills”, which were issued with a promise to convert at a later date.The perception of banknotes as money has evolved over time. Originally, money was based on precious metals. Banknotes were seen as essentially an I.O.U. or promissory note: a promise to pay someone in precious metal on presentation (see representative money). With the gradual removal of precious metals from the monetary system, banknotes evolved to represent credit money, or (if backed by the credit of a government) also fiat money.Notes or bills were often referred to in 18th century novels and were often a key part of the plot such as a “note drawn by Lord X for £100 which becomes due in 3 months’ time”. – wiki
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