In this paper, we proposed an automatic currency recognition system using digital image processing methodology. The following project mainly focuses on the recognition of currency by its image or photograph. It will help users to recognize details about currency like Currency Value, Currency Name, the value in INR, EURO and US Dollar. It works using the main characteristics of currency notes such as size colour or printed text on it and also depends on differ in currency notes within the same country. We have considered INDIAN Rupee and US Dollar, the most used currencies in our domain with their denominations. This system works accurately and also able to quickly identify the currency notes.