Good morning my respected teacher and dear friends. Today im going to talk about the evolution of money.

In our world today, money is high-tech. People not only use coins and dollar bills issued by the government as
money, but also increasingly cheques and credit cards. We are now able to move millions of dollars by touching only
one button on our mobile phones and computers. Money has always been important to people and to the economy.
Many economists, like Keynes have dealt with the question of money already and define it as “anything that is
generally accepted in payment for goods and services or in the repayment for debts”..

It serves several functions like-

1. Medium of exchange
2. Unit of account
3. Store of value

There are 5 stages of evolution of money

1. Commodity money- in the past, most societies used a commodity with intrinsic value for money. Any
commodity that was generally demanded and chosen by common consent was used as money.
2. Metallic money- with progress of human civilization, commodity money changed into metallic money.
Metals like gold, silver, copper were used as they could be easily handled and their quantity can be easily
ascertained.
3. Paper money- as commerce and trade expanded and as people made more transactions, the use of precious
metals became very inconvenient. So invention of paper money marked a very important stage in the
evolution of money.
4. Credit money- Paper currency and coins can easily be stolen and can be expensive to transport because of
their size. As a consequence, with the development of modern banking, cheques were invented. The cheque
itself is not money but it performs the same function.
5. Plastic money- Due to the development of the computer and advanced telecommunication technologies,
new advances in the payment system were made. The latest type of money is plastic money in the form of
credit and debit cards. They aim at removing the need for carrying cash to make transactions.

However, plastic money doesn’t mean the end of evolution of money. On the extreme ends of evolution of money
we have barter system on one end and E-money on the other.

Barter system
A barter system is an old method of exchange. Th is system has been used for centuries and long before money
was invented. People exchanged services and goods for other services and goods in return. The invention of
money caused the decline of the system. However, Due to lack of money, bartering became popular in the
1930s during the Great Depression. It was used to obtain food and various other services. It was done through
groups or between people who acted similar to banks.

Digital money

The forms money has taken on over centuries have always been closely connected with the technological
developments in the economy.

electronic money is an electronic store of monetary value on a technical device.

The definition of electronic money is becoming more scientific and specific with
The European Central Bank defining it as “an amount of money value
represented by a claim issued on a prepaid basis, stored in an electronic medium
(card or computer) and accepted as a means of payment by undertakings other
than the issuer”
The greatest differences to earlier forms of money are, that e-money is impersonal and virtual. Contrary to credit or
debit cards, it is always pre-paid. The private issuer of any form of e-money allocates value to a coded digital
message which is stored on a computer system or a smart card chip. The issuer guarantees a fixed reimbursement
value.
Most of these types of digital money still use national currency as a denomination of the value they store and
transfer. In addition to credit cards, which are the most widely spread payments, electronic cheques are used. They
are well suited for minipayments and may be sent through e-mail.

Conclusion

To sum up, money has taken different forms over time. As discussed in the paper, today’s money has evolved over
centuries. Due to many innovations and technological advances in the computer industry, money has become finally
what it is today: high-tech. It acts like a symbol of the commercial structure we operate in