
The currency used in India is 'Rupee' and has on it 'a promise by the Governor of the Reserve Bank", and that says the paper or note that you are carrying is worth what it says. The promise on the note or paper is significant because it the responsibility of Reserve Bank in preserving the value of the rupee. The currency in India is printed on paper. Therefore a paper is converted into amount or value just because of a promise by the Governor of Reserve Bank on that paper.
Paper currency was first developed in China; it solved many problems posed by metal coins. It is easy to transport, manufacture, and lightweight to carry. The paper required for printing Indian currency is still being imported...