Refers to paper currency as opposed to coins. The term is somewhat formal or technical; in everyday conversation, 紙幣 or お札 is more common.
The central bank manages the issuance of banknotes.
soft currency
In economics, a currency that is expected to fluctuate in value or is not freely convertible. Contrasts with 硬貨 (hard currency).
See also: 硬貨 (こうか)
Because the country only had soft currency, international transactions were difficult.
軟貨 (soft currency) is the specialized financial opposite of 硬貨 in its 'hard currency' sense.
Compound of 軟 (soft) and 貨 (currency). The term is a direct translation of the English 'soft currency' and 'paper money' (as opposed to hard coin).