The political and social order of New Spain was upset by the independence movement begun in 1810, resulting in a deep economic crisis due to the abandonment of mining (the pillar of the economy) and the repatriation of capital to the Iberian peninsula. A lack of currency added to the problems of the torn colony. From this situation arose numerous necessity currencies and the first paper money in Mexico when in 1813, a peculiar half-a-real banknote made of orange cardboard appeared in San Miguel el Grande, Guanajuato. The issuers are unknown. Another antecedent to the Mexican banknote can be found in the late eighteenth century in the former Spanish colony of Louisiana, where banknotes in several denominations were issued.

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After independence was gained in 1821, Mexico adopted a monarchic government led by the criollo leader Agustin de Iturbide, who faced a severe economic crisis resulting from the eleven-year war. In order to resolve the crisis, Iturbide attempted several measures: He gave considerable support to mining production and resorted to mandatory borrowing through both civil and military wage deductions and to tax increases. Nevertheless, the plan did not produce the results which had been expected and which were needed to support the growing expenses of the court. Instead, it proved counterproductive—the project only augmented the emperor's lack of credibility. As a drastic measure, paper money was issued on December 20, 1822. These notes are the first official issuance in Mexico and are printed on one side only on white, nearly square paper with the inscription IMPERIO MEXICANO (MEXICAN EMPIRE). One-, two-, and ten-peso denominations were issued.

The fate of the banknotes was no different from that of other actions taken by the imperial government. A public used to handling coins never accepted the notes. Furthermore, these banknotes lent themselves to misuse by officials and payers and contributed to a decline in the government's credibility. Although there were many reasons for the quick overthrow of Iturbide's government, the failure of his treasury and monetary policy was a fundamental cause.

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After the empire of Maximilian collapsed and the Republic was restored, conditions were suitable for issuing banknotes, especially during the long governance of General Porfirio Díaz (1877 - 1911). A stable, functional, and organized banking system in conformance with the Credit Institutions Law of 1897 was established, and there was at least one private bank issuing currency in each state of the country, in addition to the Banco Nacional de México, which had a nationwide presence, and the Banco de Londres y México, whose issuance concession was ratified. The banknotes issued by these last two institutions circulated nationally and were occasionally revalidated at several plazas throughout the Republic.

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General Victoriano Huerta led a military coup in February 1913 that resulted in the overthrow and assassination of Francisco I. Madero, the constitutionally legitimate president of Mexico. General Huerta ordered the private banks issuing currency to deliver the metal backing for their banknotes to his government and to issue unusually large quantities of banknotes with no backing. The Mexican banking system, built with great difficulty, thus quickly fell to pieces, along with the use and acceptance of banknotes.

Nevertheless, the lack of currency forced municipal authorities, military leaders, merchants, miners and landowners to issue necessity currencies. As a result, from 1913 to 1915, necessity currency reappeared in Mexico: several metallic coins were minted in distinct locations throughout the country, and above all, the issuance of paper money multiplied. The first to issue these currencies was Venustiano Carranza, head of the Constitutionalist Army and leader of the revolt against Huerta who, in turn, authorized several revolutionary leaders to issue their own banknotes, vouchers, and cardboard currencies to collect campaign funds.

The formal characteristics of these banknotes varied considerably. They ranged from high quality to roughly manufactured. Instead of solving the Republic's monetary problem, the large quantity of issues and their variety worsened it. These notes and coins, which Mexican people called bilimbiques, (a term originating from the contraction of the name of William Week, a North American payer from the Cananea Green Mine, whose name was mispronounced by the Mexican workers), had value inasmuch as the issuer had power and authority in a given region. Upon General Huerta's fall, the situation became more complex due to confrontation among the various revolutionary factions. The bilimbiques were continually devalued. Furthermore, new issues appeared, such as the currencies of the Mexican Provisional Government issued in Veracruz or those of the Revolutionary Convention of Mexico City. Massive counterfeiting of these currencies added to the worsening of the monetary problem in Mexico and to the bad reputation of paper money.

As Carranza's faction consolidated its power, several attempts were made to solve the country's monetary problems: the only valid paper money would be that issued by the Carranza faction and, in order to guard against counterfeiting, more sophisticated banknotes manufactured by the American Bank Note Company in New York City were ordered. These banknotes were put into circulation in May 1916, while former issues were gradually withdrawn. These banknotes were known as "forgery proof," but their fate was no different from that of previous revolutionary issues. They suffered a shocking devaluation, and by the end of that year, they were already useless. In the face of these problems, the only safe currency was the rare and scarce coin, since paper issues were only backed by the force of arms, which, in the event of a military setback, left their holders helpless.

Consequently, late in 1916 Carranza ordered that workers be paid exclusively with coins, the minting of which had been restarted at the Mexico Mint. Thus, as Carranza consolidated his military power, a glimpse of a solution to the monetary problem in Mexico appeared on the horizon.

The reconstruction of the nation posed new problems, among them, the establishment of a new national banking system. The first step was to declare bankrupt and liquidate the former Porfirian banks; the second was to establish a new issuer of currency.

Article 28 of the Mexican Constitution promulgated in February 1917 established that the sole right of currency issuance would belong to a single bank under government control. However, seven years would pass before the founding of Banco de México, which would have among its main functions the issuance of banknotes.

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The first Banco de México banknotes were printed by the American Bank Note Company of New York (ABNC) in a 180 x 83 mm size. This first series (1925-1934) consisted of five, ten, 20, 50, 100, 500 and 1000-peso banknotes.

Later, from 1936 to 1942, a second transitory series was issued. This series was also printed by the New York firm, but in a smaller size (157 x 67 mm). The five- and ten-peso notes maintained the former designs, while the 50- and 100-peso notes adopted new ones, with the images of honored individuals appearing for the first time on Banco de México banknotes.

A new chapter in Mexican banknote history opened in 1969 when Banco de México Banknote Factory began operations. With it, a new generation of Mexican banknotes appeared. These banknotes were made using the latest technological advances and had designs incorporating iconography and concepts departing from those that had previously prevailed. This fourth series (1969 -1991), the first to be manufactured domestically, consisted of banknotes in denominations of five, ten, 20, 50, 100, 500, 1000, 2000, 5000, 10,000, 20,000, 50,000 and 100,000 pesos.

With the aim of simplifying the handling of domestic currency amounts, according to the decree of June 18, 1992, a new unit of the national monetary system was created equivalent to 1000 pesos of the former unit. In order to distinguish it from the former monetary unit, for a transitory period the adjective “nuevo” (new) was used before the word “peso." The use of the adjective was omitted at the start of 1996. In 1992, Banco de México issued a new series of banknotes in denominations of ten, 20, 50 and 100 pesos with the adjective "new" before the unit's name. These notes, known as Type B banknotes, conserved the former banknotes' design.

Twenty-peso polymer banknotes were put into circulation on September 30, 2002. Polymer is a more lasting material, which is why it was incorporated into these low-denomination banknotes, which suffer faster deterioration than other notes. These banknotes are also manufactured at Banco de México Banknote Factory and are similar in appearance to the paper notes, except that they have a see-through window, a distinctive safety feature.

In order to facilitate certain cash transactions for the public, on November 15, 2004, the Type D1 1000-peso paper banknote was put into circulation.

Type F banknotes went into circulation on November 2006. In addition to changes in security features, this banknote family is characterized by having different lengths for each denomination. The members of this banknote family went into circulation as follows:

Denomination	Material	In circulation as of	Image
Fifty pesos	Polymer	November 21, 2006
Twenty pesos	Polymer	August 20, 2007
One-thousand pesos	Cotton paper	April 7, 2008
Two-hundred pesos	Cotton paper	September 8, 2008

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