I'm not sure which SE network this question belongs to, but this seems to be the most appropriate one.
What determines the choice of banknote denominations?
Obviously, the first factor is the numeral system used (base-10 means it will be easy to work with 1, 10, 100, etc. denominations). It seems like most of the world also issues 2 and 5 multiples of of the above denominations (2, 5, 20, 50, etc.). One exception I can think of is that USSR used to issue banknotes of 3 and 25 rubles.
Most currencies also have subunits. Why is this often the case and why is the unit usually divided in 100?