Evolution of Money

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1. TOPIC OF PRESENTATION
EVO
LU
TIO
N
O
F
M
O
N
EY

2. MONEY
Money is any thing which is used as a medium of
exchange.

3. EVOLUTION OF MONEY
The word “money” is derived from the Latin word
“Monet”
The origin of money is lost
Hunting society, skin of wild animals were used as
money
Pastoral society used livestock
Agriculture society used grain and foods
The Roman used cattle and salt.

4. EVOLUTION OF MONEY
Money was developed according to needs &
Requirements.
Main aim was to remove the shortcomings of the
Barter System.

5. DIFFERENT STAGES OF EVOLUTION OF MONEY
1.COMMODITY MONEY
2.METALIC MONEY
3.PAPER MONEY
4.CREDIT MONEY
5.ELECTRONIC MONEY

6. 1. COMMODITY MONEY
When different commodities were used as a medium of
exchange (BARTER SYSTEM)
Cow , Goats, Axes, Dried Fishes etc were used as
medium of exchange.

7. 1. COMMODITY MONEY
Commodity money had different problem like:
1.Storing Problem
2.Durability problem
3.Transportation problem
4.Divisibility problem

8. 2. METALLIC MONEY
The next step in the evolution was the discovery of
precious metals like Gold, Silver, Copper.
“ Metallic Money consist of coins made of Gold,
Silver, Copper or nickel as a mode of payment.”

9. 2. METALLIC MONEY
UnCoined Metals
Metals were not used as a coin but as a Bullion.
This created the problem of measuring the weight &
Value.
Supply of money also became problem when the
mines were fully used up or new mines were
discovered.

10. 2. METALLIC MONEY
Coined Metals.
As a next step, standard coins were created.
They had a standard weight & value.
Problem of un coined metals dissolved by the use of
coined metals.

11. 2. METALLIC MONEY
Metallic money can be:
FULLY BODIED
Whose Face Value is equal to the value of metal
contained in it.
TOKEN MONEY
Its Face Value is Higher than Intrinsic Value (Value
of Metal)

12. 3. PAPER MONEY

13. 3. PAPER MONEY
When paper currency was introduced as a mode of
payment.
Originated as a receipt issued by Goldsmiths.
These receipts were then later on used for payments.
Difference in the value of receipts was becoming a
problem then.

14. 3. PAPER MONEY
PAPER MONEY
Refers to the Notes issued by the State or by the
Bank, usually the Central bank.
Paper Money can be:
1.Representative Paper Money.
2.Convertible Paper Money.
3.Fait Paper Money.

15. 3. PAPER MONEY
Representative Paper Money.
It is that money which is fully backed by
equivalent metallic reserves.
Convertible Paper Money
Which is convertible into coins on demand.
Fait Paper Money
Which is not redeemable or convertible into Gold
or Silver on demand. It is accepted because it is
declared legal tender by the issuing authority and
has general acceptance as a medium of exchange.
The intrinsic value of Fait money is Nil.

16. 4. CREDIT MONEY

17. 4. CREDIT MONEY
Includes Bank money (different instruments offered
by the Banks.)
Cheques, Drafts, etc are examples.
Convenient, Safe and easily convertible into cash.
Its like Near Money.

18. 5. ELECTRONIC MONEY

19. 5. ELECTRONIC MONEY
Electronic money (also known as e-money,
electronic cash, electronic currency, digital
money, digital cash or digital currency) refers
to money or scrip which is exchanged only
electronically. Typically, this involves use of
computer networks, the internet and digital
stored value systems.

20. CHARACTERISTICS OF MONEY

21. CHARACTERISTICS OF MONEY
General Acceptability.
Stability of Value.
Transportability.
Storability
divisibility.