How did paper banknotes come into existence?

At different periods of time and in different parts of the world many different commodities have served as money. These commodities were: cattle, sheep, furs, leather, fish, tobacco, tea, salt, shells, etc. The experts underline that to serve effectively as money, a commodity should be fairly durable, easily divisible, and portable. None of the abovementioned commodities possessed all these qualities, and in time they were superseded by precious metals.

First they were superseded by silver and later by gold.

When a payment was made the metal was first weighed out. The next stage was the cutting of the metal into pieces of definite weight and so coins came into use.

Paper money first came into use in the form of receipts given by goldsmiths in exchange for deposits of silver and gold coins. After goldsmiths became bankers their receipts became banknotes. That`s how the first banknotes came into existence. At first coins were worth their face value as metal. But later token coinsof limited value as legal tender were issued. Now smaller denomination coins are made from bronze and are often referred to as coppers. Bigger denomination coins are made from cupronickel and are usually called silver.