A stupid question, banknote is money, right?

like $1 $5 bills are banknotes. and why banknote is liability?

Could you be clearer on what you are trying to ask? Are you referring to the liabilities of the Central Bank? The liabilities of the CB are what it owes others. THe money that the CB issues are claims that other people, e.g. people like us, have on the CB. Banknotes=currency that we have in our wallets, so that means that they are a claim that we peeps have on the CB. Therefore it is a liability on the B/S of the CB

yeah, a banknote is the stuff you stick in your wallet. It’s called that because it’s a promissory note made by a bank. You own the note so you can get something for it, and that’s usually enforced by legal tender.

3x for both of u, i meant the central bank, and how about the banknotes from commercial bank? Are those currency?

I’m nogt much of an expert on this but didn’t the Federal Reserve Act in 1913 make private banknotes illegal in the US?

I’m not an expert either but I do know this much…the issuance of currency is a core function of any Central Bank. Hence, banknotes from a commercial bank(if issued by them) does not count as currency. It’s just paper. However, when you walk up to an ATM and withdraw money from a commercial bank, it’s currency…because they merely transfer it to you. central bank -->Commercial bank1—>Withdrawer1—>Depositor1—>Commercial bank2—>You

I was a bit unsure when I saw wolwol’s post too, but I thought since he/she mentioned about the dollar bills, I thought that was what he/she was referring to but because of a “language” problem he/she called it a banknote. :S