Other definitions of the term “currency” are discussed in their nz forex online currency payments synonymous articles banknote, coin, and money. The latter definition, pertaining to the currency systems of nations, is the topic of this article. This article does not cite any sources. Cowry shells being used as money by an Arab trader.
Originally money was a form of receipt, representing grain stored in temple granaries in Sumer in ancient Mesopotamia and later in Ancient Egypt. In this first stage of currency, metals were used as symbols to represent value stored in the form of commodities. This formed the basis of trade in the Fertile Crescent for over 1500 years. It is thought that the increase in piracy and raiding associated with the Bronze Age collapse, possibly produced by the Peoples of the Sea, brought the trading system of oxhide ingots to an end. These factors led to the metal itself being the store of value: first silver, then both silver and gold, and at one point also bronze. Now we have copper coins and other non-precious metals as coins. Metals were mined, weighed, and stamped into coins.
This was to assure the individual taking the coin that he was getting a certain known weight of precious metal. Most major economies using coinage had several tiers of coins, using a mix of copper, silver and gold. In premodern China, the need for credit and for a medium of exchange that was less physically cumbersome than large numbers of copper coins led to the introduction of paper money, i. Song dynasty Jiaozi, the world’s earliest paper money. First, since a note has no intrinsic value, there was nothing to stop issuing authorities from printing more notes than they had specie to back them with. Second, because it increased the money supply, it increased inflationary pressures, a fact observed by David Hume in the 18th century.