Evolution of Currency
- 3. CURRENCY Currency is a generally accepted form of money, including coins and paper notes, which is issued by a government and circulated within an economy. Used as a medium of exchange for goods and services, currency is the basis for trade.
- 4. EVOLUTION OF CURRENCY • The word currency is derived from middle English ‘currant’ which means in circulation . • Hunting society , skin of wild animals were used as mode of trade. • Pastoral society used livestock. • Agricultural society used grains and foods. • The Roman used cattle and salt.
- 6. BARTER •The exchange of merchandise for merchandise, without value equivalence. •Bartering was recorded in Egypt.
- 8. DRAWBACKS OF BARTER SYSTEM • Double Coincidence of Wants • Absence of Common Measure of Value • Lack of Divisibility • The Problem of Storing Wealth • Difficulty of Deferred Payments • Problem of Transportation
- 9. COMMODITY MONEY • Commodity money is money whose value comes from a commodity of which it is made. • Commodity money consists of objects that have value in themselves (intrinsic value) as well as value in their use as money.
- 11. DRAWBACKS OF COMMODITY MONEY • Indivisibility, perishability, tendency to fluctuate erratically and variations in quality . • It may vary in quality. Due to variations in quality, lower-quality commodities tend to drive higher-quality commodities out of circulation.
- 12. METAL • As soon as man discovered metal, it was used to made utensils and weapons previously made of stone. • The possibility of treasuring, divisibility, easy of transportation and beauty, metal became the main standard of value. • At the beginning, metal was used in its natural state, and later under the form of ingots and, still, transformed into objects, from rings to bracelets.
- 13. DRAWBACKS OF METAL • Metal items came to be very valued commodities. • As its production required, in addition to knowledge of melting, knowing where the metal could be found in nature, the task was not at the reach of everyone.
- 14. MONEY IN THE FORM OF OBJECTS • The increased value of these objects led to its use as money and the circulation as money of small- scale replicas of metal objects.
- 15. • This is the case of the knife and key coins found in the East and the talent, a copper or bronze coin with the form of an animal skin that circulated in Greece and Cyprus.
- 16. ANCIENT COINS • In the 7th century B.C. the first coins resembling current ones appeared: • They were small metal pieces, with fixed weight and value, and bearing an official seal, that is the mark of who has minted them and also a guaranty of their value.
- 17. • At the beginning, coin pieces were made by hand in a very coarse way, had irregular edges, and were not absolutely equal to one another as today’s ones.
- 18. GOLD, SILVER AND COPPER • The first metals used in coinage were gold and silver. • Employment of these metals happened for their rarity, beauty, immunity to corrosion, economic value, and for old religious habits.
- 19. • Countries minted their most highly valued coins in gold, using silver and copper for lesser value coins. • Large quantities of modern alloys appeared, produced to support the high circulation of change money.
- 20. PAPER MONEY • In the Middle Ages, the keeping of values with goldsmiths, persons trading with gold and silver items, was common. • The goldsmith, as a guaranty, delivered a receipt. • With time, these receipts came to be used to make payments, circulating from hand to hand, giving origin to paper money.
- 21. • In Brazil, the first bank notes, precursors of the current notes, were issued by Banco do Brasil in 1810. • Paper money experienced an evolution regarding the technique used in their printing. • Assured great margin of security and durability.
- 22. DIFFERENT SHAPES • Money has greatly changed its physical aspect along the centuries. • Bank notes were generally of rectangular lengthwise format, although with great variety of sizes. • Bank notes depict the culture of the issuing country.
- 23. • Bank notes bear, in addition, inscriptions, generally in the country’s official language, although several also bear the same inscriptions in other idioms. • The inscriptions, frequently in English, aim at permitting the piece to be read by a larger number of people.
- 24. MONETARY SYSTEMS • The set of coins and bank notes used by a country form its monetary system. • The system is regulated by appropriate legislation and organized from a monetary unit, its base value.
- 25. • The countries, through their central banks, control and guarantee the issue of money. • The set of notes and coins in circulation, the so called monetary mass, is constantly renewed through the process of sanitation, substitution of worn out and torn notes
- 26. CHECKS • This document, by which one orders payment of a certain amount to its bearer or to a person mentioned in it, aims mainly at transactions with bank deposits.
- 27. ELECTRONIC MONEY • Refers to money or scrip which is exchanged only electronically. • Typically, this involves use of computer networks, the internet and digital stored value systems.
- 28. CHARACTERISTICS OF MONEY • General acceptability • Stability of value • Transportability • Storability • Divisibility
- 30. NAME – DEEKSHA SHARMA BRANCH – B.TECH CSE SEMESTER – IV