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.”
10. 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.
11. 3. PAPER MONEY
PAPER MONEY
● Refers to the Notes issued by the State or by the
Bank, usually the Central bank.
13. 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.
15. 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.
