The question of the introduction of a national currency arose as far back in 1919. On August 12, at the sitting of the Cabinet of Ministers the new monetary unit was given the name of “muštinis“. Notes worth ½, 1, 5, 10, 25, 50, 100, 500 and 1000 “muštinis” were to be issued. The patterns of paper money were to be designed by the artists A. Žmuidzinavičius and A. Galdikas. The notes were to be printed in Sweden. The project, however, was not carried out and the introduction of a national currency was postponed for three more years.
On August 9, 1922, the Constituent Seimas passed a law on a new monetary unit, declaring the introduction of gold currency. The Bank of Lithuania was authorized to issue the litas and was granted a concession of the issue of the notes for the 20 years. For the initial stage the bank was appropriated 3 million gold into rubles, received from Soviet Russia in accordance with the peace treaty of July 20, 1920. The litas came into use on October 2, 1922, and contained 0,150462 g pure gold (i.e. the litas was equivalent to 0.10 US dollar). First, in accordance with the agreement signed on April, 1922, interim notes were issued at the Otto Elsner printing house in Berlin. The urgency of the order explains the simple designs and small size of the notes. The interim notes were brought to Kaunas on September 20.
The notes of November 16, 1922 issue were printed at the A. Hasse printing house in Prague. The agreement was signed on August 29, 1922. The cent appeared in circulation at the beginning of November and the litas at the end of 1922 – the beginning of 1923. The patterns of the litas note were designed by the artist A. Varnas who headed the commission supervising the printing in Prague.
In 1924 the Bank of Lithuania decided to issue notes worth 500 and 1000 litas. The patterns of the notes were revised at the sitting pf the General Board of the Bank on November 10, 1924. The sitting on December 11, 1924, decided that the pattern by V. Jomantas and A. Galdikas were to be used, bearing the date of sitting. The banknotes were printed at the printing house of Bardbury, Wilkinson & Co. in accordance with the agreement signed on February 11, 1925. 500 litas notes came into use on September 28, 1925, and 1000 litas notes on January 23, 1926. The client was obviously content with the execution of the order because all the later issues were performed by the same company.