currency

Tokens used as money in a country. In addition to the metal coins and paper bank notes, modern currency also includes checks drawn on bank accounts, money orders, travelers checks, and will soon include electronic money or digital cash.

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Note added at 21 minutos (2010-12-03 13:49:18 GMT)
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NO WAY, ANDRES HAS THE RIGHT ANSWER

Paper currency and paper money are synonymous and both mean banknotes. Paper money in this sense is strictly moneda de papel in Spanish; papel moneda, widely used in this sense, actually means what your author says: not only bank notes, but also treasury bonds, promissory notes, credit notes, etc.; in short, any sort of negotiable instrument.
"En el concepto rigorista de la ciencia económica, no es lo mismo moneda de papel que papel moneda [...].
El papel moneda representa un valor real o positivo, que circula voluntariamente corno signo de moneda, y está formado por los efectos de comercio y demás documentos de crédito que emiten los gobiernos, los Bancos, las sociedades, las empresas, los comerciantes o los particulares con la obligación de reembolso a la vista o en fecha determinada, como los bonos del Tesoro, los billetes de Banco, las letras de cambio, las libranzas, los pagarés o los warrants."
http://www.eumed.net/libros/2006a/ah-circ/1m.htm
"A negotiable instrument is a document contemplated by a contract, warranting (1) the payment of money, the promise of or order for conveyance of which is unconditional; and, (2) which specifies or describes the payee [...] Common examples include promissory notes, cheques, and banknotes."





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Note added at 5 hrs (2010-12-03 19:18:37 GMT)
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Second quotation is from the inevitable wikipedia: http://en.wikipedia.org/wiki/Negotiable_instrument

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Note added at 5 hrs (2010-12-03 19:20:29 GMT)
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PS. I agreed with Andres by mistake; I meant to disagree!

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Note added at 3 days5 hrs (2010-12-06 18:58:41 GMT)
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This question is long since closed for practical purposes, I am sure, but let me make one more attempt to get my point across, since so many people have agreed with what I believe to be the wrong answer. Papel moneda is an expression normally used to refer to paper currency (or paper money, or banknotes, all of which are synonyms). That is how it is translated in a number of bilingual dictionaries (such as Collins and Espasa, for example) and that is how it is defined in the DRAE. However, the author of the text being translated has said quite explicitly that (s)he does not mean that, but is using papel moneda to mean a range of things including but not confined to paper currency/banknotes. I have argued that this range of things corresponds to what are called negotiable instruments in English, and I believe that anyone who investigates what negotiable instruments are will agree. This use of papel moneda is certainly unusual, and is not found in dictionaries, but as my reference shows it is neither unique nor illegitimate; on the contrary, it is strictly more accurate than that generally accepted meaning. But in any case, we as translators must try to render what the author wants to say; I cannot understand how, in good professional conscience, we can knowingly put something that is not what the author meant to say.