Our Banknotes
Throughout the centuries, our banknotes have helped build trust and stability as well as reflecting national pride.
Striking the right note
In the 18th and 19th centuries hundreds of British banks - most of them small, local enterprises - issued their own banknotes. When The Royal Bank of Scotland was established in 1727, starting up a banknote issue was one of its directors' first priorities. They based their first designs on the notes of existing rivals, but added an impressive new detail; a portrait of the King. This was the first banknote in Britain to include such an intricate illustration.
This was the beginning of a long history of innovation in banknote design, driven by the requirement to make notes attractive and acceptable to the general public, while always protecting them against counterfeiters. In 1777, we became the first bank in Europe to issue multi-coloured banknotes, and in 1826 we issued Britain's first double-sided note.
Building trust and stability
Throughout all these changes, one feature that remained the same was the vital importance of banknotes to the economy in Scotland, where there were often chronic shortages of coins. Unlike many other nationalities, the Scottish people developed absolute trust in their banknotes, which contributed to the near-unique stability of Scotland's early banking system.
Reflecting national pride
When the British government periodically threatened to withdraw or limit the Scottish banks' right to issue notes, the nation rose up in protest, celebrating their banknotes as a matter of national pride and identity. It is thanks to the popularity of the notes, and to the demonstrated stability of the system, that Scotland's banks have been allowed to continue issuing pound sterling notes to this day.
- How old is the Royal Bank?
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The Royal Bank of Scotland itself was established by royal charter on 31 May 1727. Some of our constituent businesses are even older, dating back as far as the 1580s. You can learn more about them at RBS Heritage On-line.
- Is it true that Scottish banknotes are not legal tender?
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Yes, it is - but Bank of England notes aren't legal tender in Scotland either. Officially, the phrase 'legal tender' means money that a person is obliged to accept if offered it in payment of a debt. Under Scottish law, that does not include banknotes, which are classified as 'legal currency' but not 'legal tender'.
The only historical exception was during the two world wars, when as a temporary measure the government made banknotes legal tender in Scotland, as a way of reinforcing people’s trust in them. This was important in a time of shortages, when the government needed to be sure that people would not hoard gold.