In the Republic era of Texas, money was handled in real notes or coins. During this period, not a single incorporated or private bank operated in the in Texas. Texas currency was established in 1837 and engraved notes began to appear early in 1838. By the time Texas entered the union as a state, Texas currency had been devalued below 25 cents on the dollar.
Script and warrants were issued by the Texas government as a promise to pay it's debts, if the Republic ever actually had any money in it's treasury.