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Evolution of Money: From Barter to Digital

The document outlines the evolution of money from barter systems to valuable objects, metal coins, and paper money, highlighting key contributions from China, Lydia, Canada, and France. It discusses the challenges of barter, the transition to standardized coins, and the impact of inflation on paper currency. The emergence of digital currency represents the latest phase in the evolution of money.

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Jessa Mae Boral
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75 views2 pages

Evolution of Money: From Barter to Digital

The document outlines the evolution of money from barter systems to valuable objects, metal coins, and paper money, highlighting key contributions from China, Lydia, Canada, and France. It discusses the challenges of barter, the transition to standardized coins, and the impact of inflation on paper currency. The emergence of digital currency represents the latest phase in the evolution of money.

Uploaded by

Jessa Mae Boral
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

INTRODUCTION

Before money, trade was conducted through barter. People exchanged goods and services directly.

Challenges of barter:

- Double coincidence of wants.


- No common measure of value.
- Difficulty in storing wealth.
EARLY FORMS OF MONEY

To address barter issues, people used valuable objects as money.

Examples:

 Salt
 Metal
 Farm animals
 Shells
 Feathers
 Animal teeth

Transition to Metal Money

 Metal pieces used as money due to durability and ease of carrying.


 China (1000 BC) used miniature bronze tools as currency.
 Western Europe used bronze rings and celts.
 Coins replaced impractical objects like miniature daggers and hoes.

China’s Contribution to Money Development

- First known metal coins in 1000 BC.


- Used bronze tools and rings.
- Moved from coins to paper money around 700 BC.
- By AD 1271, China had a structured money system.

Lydia and Coinage

- Lydia (modern-day Turkey) was the first to mint standardized coins (around 600 BC).
- Coins were made from electrum (a mix of gold and silver).
- Improved trade by providing a reliable medium of exchange.

Canada and Paper Money

- Introduced card money in 1600 due to a coin shortage.


- Governor Louis de Buade reissued card money in 1601.
- Paper money became widely accepted for transactions.
- French colonies in Canada valued coins higher than in France.

France and the Development of Money

 The livre was France’s currency from 1781 to 1794.


 Copper coins introduced in 1722 but not widely accepted.
 Promissory notes and treasury notes circulated as money.
 Government issued card money and legal tender notes.
Inflation and Paper Money Issues

- Increased paper money led to inflation in the 1750s.


- In 1759, the French government suspended payments. By 1760, paper money became worthless
after British conquest.
- Gold and silver coins returned to circulation.

The Treaty of Paris (1763)

 Settlement of paper obligations in Canada included in the treaty.


 Ended the war between Great Britain and France
 Gold and silver regainedimportance as currency.

Modern Money and Digital Currency

- Paper money led to increased global trade.


- Electronic transactions reduced the need for physical cash.
- Cryptocurrencies emerged as a new form of money.

SUMMARY

- Money evolved from barter to valuable objects.


- Metal coins and paper money revolutionized trade.
- China, Lydia, Canada, and France played key roles.
- Digital currency is the latest phase in money evolution.

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