banknote vs paper money

banknote and paper money both are nouns.

Word	Noun	Adjective	Verb	Adverb
banknote	Yes	No	No	No
paper money	Yes	No	No	No

As nouns, paper money is a hypernym of banknote; that is, paper money is a word with a broader meaning than banknote:

banknote: a piece of paper money (especially one issued by a central bank)
paper money: currency issued by a government or central bank and consisting of printed paper that can circulate as a substitute for specie

Other hypernyms of banknote include folding money, paper currency.

banknote (noun)	paper money (noun)
a piece of paper money (especially one issued by a central bank)	currency issued by a government or central bank and consisting of printed paper that can circulate as a substitute for specie