Central bank monopolies on note issue

In London, Bank of England was created in 1694. It was designed primarily to assist the government with war finance (by converting a portion of the government’s debt into shares in the bank). The bank was endowed with distinctive privileges. From 1709, it was the only bank allowed to operate on a joint-stock basis. From 1742, it established a partial monopoly on the issue of banknotes, a distinctive form of promissory note that did not bear interest, designed to facilitate payments without the need for both parties in a transaction to have current accounts.