Did you know that seven different £20 banknotes circulate in the UK today?

£20 banknotes issued by the Bank of England and Scottish and Northern Irish banks. The Bank of Scotland was the first bank in Europe to print its own banknotes in 1695.

Most people think of the Bank of England as the sole issuer of banknotes—but that’s only part of the story. In addition to its fiat notes, three banks in Scotland and three in Northern Ireland issue their own banknotes, which must be backed by Bank of England notes, reserves, or gold.

Despite the UK’s reputation for financial modernity, this system offers a fascinating window into the monetary practices of the past. In earlier centuries, goldsmiths and merchants held coins on deposit for their clients and issued promissory notes redeemable for that metal. Over time, those paper claims began to circulate as money themselves—giving birth to the banknote.

Unlike fiat currency, private banknotes are only as good as the assets backing them.

Historically, this led to trouble. In a competitive environment, banks were tempted to hold minimal reserves to boost profits—often at the cost of stability. Crises and inflation followed, prompting states to centralize money issuance in newly empowered central banks.

Yet in Scotland and Northern Ireland, a vestige of that earlier system persists—with a modern twist. Today’s private banknotes aren't issued when you make a deposit. Instead, they’re disbursed at withdrawal and backed by assets held with the Bank of England. Here’s how it works, according to DeepSeek:

Deposits (No Private Notes Issued)

When you deposit cash at a Scottish (RBS, Bank of Scotland, or Clydesdale) or Northern Irish bank (Bank of Ireland, Northern Bank, Ulster Bank), your account is credited—but the bank doesn't print new notes.

Withdrawals (Private Notes Dispensed)

• ATMs in Scotland typically dispense the issuing bank’s own notes (e.g., an RBS ATM gives RBS £20s).

• Tellers usually provide the bank’s own notes unless you specifically request Bank of England notes—and they have them available.

  
  

Exceptions

• In England, withdrawals from banks like Barclays or HSBC give you only Bank of England notes.

• In Scotland, you can request BoE notes—but availability isn’t guaranteed.

Example:

1. You deposit a £50 Bank of England note into your Bank of Scotland account.

2. Later, you withdraw £50 from a Bank of Scotland ATM.

3. You receive a Bank of Scotland £50 note—not the same one you deposited.

4. The original BoE note may be recirculated or held as reserve backing.

   
   

A fascinating blend of history and modern finance — and a reminder that many of today’s “innovations” are simply digital reimaginings of old ideas. After all, how different is a currency-backed stablecoin from a Scottish banknote? Both are privately issued claims on state-backed money, designed to circulate as a token (physical or digital) with confidence --- which points to a convergence in regulatory approaches, following the maxim same risk, same regulation.