Currencies of the World
In the pre-currency age people simply exchanged merchandise for merchandise. For example, if a baker wanted two bottles of milk he and the farmer would have to agree upon how many loaves were equivalent to one bottle of milk in lieu of a means of equal value.
Commodities that were highly sought after were often normalised and accepted by a group of people to function in the same way as a currency would. The agreed commodities would circulate as an element of trade, so that individuals could purchase other products that were valued in terms of these particular items. Examples include: coffee, salt, sugar, tobacco, cloth, cocoa, and livestock.
However, the inconvenience involved - trading with others who did not share the same standardised commodity, transporting it and the short shelf life of fresh foods - saw the need for a coinage system as a medium of exchange.
The first coins resembling those of today, are said to have appeared around the 7th Century BC. The coins were made out of round shapes of metal in Anatolia in what is now the west coast of Turkey. Over the course of time coins begun to incorporate impressions and designs that represented the cultural groups that used them. When major economies began to develop, gold, silver, copper, and other metals were used to make coins.
The coins' weight often symbolised its value. Gold coins were often worth more and were used for larger purchases by kings and state officials. Silver was used for larger common transactions such as taxes and copper and other metals were used for everyday common transactions. This system was used in ancient India and throughout much of Europe during the medieval period. Only until the last century, did coins come to be accepted for their extrinsic value versus their metal content value.
The history of paper money begins in the Middle-Ages when goldsmiths would deliver receipts as a form of payment to a person trading in gold or silver. These receipts would then change hands, until one wished to claim the initial payment. In 17th century Sweden, paper money represented that the owner was able to back the amount stated on his paper. However, there was always the concern that the issuing authority did not possess sufficient money to back up the note or that it was a forgery. Thus, major countries developed their own central banking and minting system to print money and hold coins, while the national treasury held gold and silver stock.
Countries would later add their own emblems, designs and values to their national currencies. A country's money had unique physical characteristics, making it not only stand out from other currencies, but representative of its culture and individual economy. Today, national banks, governments, and legislations control the printing and policies of the nation state's legal tender.