Evolutions of money as unit of exchange

The chapter provides an overview of evolutions of Money as Unit of Exchange. Here is provided an overview of the emergence and development of money as a medium of exchange for commodities from ancient times to the present and its implications for the internationalisation and globalisation of business.

With the development of commodity exchange, primitive peoples needed things that could be exchanged for any commodity. In the beginning, these exchange items had their own value and functionality. These included cattle, fishing tools, agricultural tools, weapons, furs, silk, jewellery, feathers, animal teeth, ivory, shells, gunpowder, tobacco, tea, grain, and cocoa beans. If it was a large, expensive object (e.g., a bull), it could be compared to smaller objects and was, therefore, a measure of value. A smaller, more demanded object could be a means of payment or accounting for accumulated wealth and, thus, a circulating currency.

People’s desire for confidentiality, independence from governments, and technological advances at the beginning of the 21st century led to the emergence of a new type of money – cryptocurrencies. Cryptocurrencies are digital and virtual-only currencies based on blockchain technology that allows various online payments to be made anonymously without needing third-party intermediation. This means that economic operators can pay each other for products or services without using banks and without using state-issued currencies.

Ex. 2‑5 Money at different points in history

Ex. 2‑6 Major capitalisation (2023) cryptocurrencies

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