Abstract: Paper currency is one of the important features of character notes,a group of characters to uniquely identify the paper currency identification.Able to quickly identify the paper characters directly affect character recognition accuracy and speed of paper money.A character recognition method was designed.Based on template matching algorithm which is widely used,the designed method firstly improved the standard template matching algorithm and employed fuzzy theory as identification criterion to recognize character.The proposed method can fully separate the influence on character recognition which was caused character stroke and character tailing,so as to effectively improve the recognition rate and robustness.The experiment results show the designed method has better performance.