What is Currency ?

Currency is the universal medium of exchange for goods and services in any economy. In short , it is money that we use in everyday life. Currency can be in different forms, it can be coin made out of gold or silver or any other metal. Currency can also be in the form of paper. Which is usually issued by a government and generally accepted at its face value as a method of payment. In modern world, currency is the primary medium of exchange, whereas Barter system was the primary medium of exchange in ancient time. Another new form of currency has come into existence in 21^st century , which is called virtual currency, such as bitcoins. Bitcoins neither have any physical form nor its issued by government monetary authority. But its accepted by mass of people stored in electronic form.

History of Currency

Coinage: during coinage, metal coins were used as currency. It began with silver, then both silver and gold, and also bronze were used at some point. Metals were mined from mines , then weighed and then stamped into coins. The individual accepting the coin was assured by giving him a certain measure of value in the form of precious metal. Gold coins being the most valuable were used for large purchase , payment of the militay , and supporting the state activities.

Paper Money: Usage of large number of coins led to the introduction of paper money i.e banknotes. A banknotes is a type of negotiable promissory note, made by bank or by monetay authority , payable to the bearer on demand. And it is circulated for the transaction involved in acquiring goods and services. The printing of paper money is typically regulated by a country's central bank or treasury in order to keep the flow of funds in the line with monetary policy.