When did the world start using metal coins and paper currency?
Money is an indispensable necessity to run our daily lives. In the modern day, we pay either through cash or a simple online transaction. The practice of exchanging money for goods has existed for much longer than you might think. But money didn’t always mean paper notes and metal coins as it does now. There was a time when people exchanged goods instead of cash. Yes, we are talking about the barter system which dates back to 6000 BC when people exchanged goods like tea, salt and food for their needs. These transactions paved the way for the modern economy and the introduction of metal coins, followed by paper notes. Let us take you through the journey of money through history.
The world welcomes the first coins
Growing up, we have all carried coins in our pockets, enroute to our favourite shops to buy candies or small things that we loved. But when did coins originate? They were the first metal money introduced to the world by China, during 1000 BC. These coins were made from stamped bronze and copper pieces. However, coins did not originate solely in China. The use of coins dates back to ancient Greece as well. Around 600 BC, the Greeks issued their first official currency, the Lydian Star. From there, coins have evolved throughout history, with the first round coins being created around 500 BC. These coins were stamped with God’s and emperors’ faces for authenticity. Now, fast forward to 13th century Europe. This is when shilling and pound made it to the global economy.
Coins were a significant milestone in the history of money. Previously, people paid for goods by weight, but with the availability of money, people started paying by the number of coins. This simplified trading remarkably.
In comes paper currency
The journey of money’s journey took a significant, when paper currency was brough in. Let’s see how this transformation began. After introducing the world to the first coin currency, China also introduced the world to paper money. In 1260 CE, China transitioned from coins to paper money during the Yuan dynasty (1271 to 1368). You’ve probably seen a dollar bill with the words ‘In God We Trust’ written on it, right? The concept of printing on notes was also developed by the Chinese! In 1260 CE, their notes stated, ‘Those who are counterfeiting will be beheaded.’ Obviously, the current Chinese notes don’t say that.
The transition to paper money took longer in European nations who were still using coins. Europe’s governments did not begin printing paper currency until the late 1600s.After the shift to paper money happened in Europe, it increased the amount of international trade. However, this also led to a silent war called the currency war which is going on even today in the foreign exchange market. In this war, nations try to devalue other nation’s currency to boost their own economy. For example, the Indian rupee is always struggling in front of the American dollar! The rise or fall in the value of a currency in comparison to dollar can shake the economy of any country.
The rise of digital money and cryptocurrency
Following the introduction of the first coin and paper money, several other novel forms of currencies emerged. You’ve seen the rise of online payments, debit and credit card payments and the recent obsession with cryptocurrency (digital currency created using algorithms). Everyone’s lives have been made easier by online payments. Now, there is no need to carry coins or cash in your wallet, thanks to Unified Payments Interface (UPI). A simple tap on your smartphone is all that is required to transfer money from one account to another. Cryptocurrency is another important player in the current global economy. Like traditional money, cryptocurrency also has values assigned to it. You’ve probably heard of the cryptocurrency called bitcoin. The total value of the world’s bitcoin is currently over 392 billion!