Paper currency recognition with good accuracy and high processing speed has great importance for banking system. How to extract high quality monetary features from currency images is a key problem in paper currency recognition. Based on the traditional local binary pattern (LBP) method, an improved LBP algorithm, called block-LBP algorithm, is proposed in this paper for characteristic extraction. The proposed method has advantages of simplicity and high speed. The experimental results show that this improved method has a high recognition rate, as well as robustness for noise and illumination change.