Types of money
Based on the nature of the material, we can distinguish two main types of money: natural and symbolic. Accordingly, there is a metal monetary system consisting of gold ingots and coins, and a system of credit money consisting of bills of exchange, checks, banknotes, deposit accounts, etc.
Natural money
Natural money includes all types of goods that were universal equivalents in the early stages of commodity development. We will not look at cattle, grains, furs, shells and other goods that have left little trace in the evolution of money.
Let's move on to the time when commodity transactions were first calculated with bars of gold (or silver) of a certain weight, and then with coins. Metal money emerged in ancient times. In Russia, the emergence of the first coins is attributed to the IX-XX centuries. The XIX century and the beginning of the XX century are considered to be the era of domination of gold coins. A characteristic feature of natural money was that they could exist not only as money but also as a commodity while having its own value. For this reason, at that time there could not be a situation of a discrepancy between the volume of money supply and the volume of goods and services in the market. If there was an excess of money, gold and silver coins were withdrawn from circulation, settling in the pockets of the population as a treasure. Limited extraction of gold and silver was an obstacle to the uncontrolled emission of money. Together, these circumstances made inflation impossible, which became an inevitable evil in the transition from natural money to their substitutes.
Symbolic money
Symbolic money is called substitutes for natural (real) money, value marks. Paper and credit money are considered symbolic money. The first appearance of paper money was noted in the XIII century in China. In XVII-XIX centuries, they appeared in the states of Europe and North America. In Russia, it is 1769. Thus, the reference of paper money was characteristic of all the leading powers of the world. Paper money along with metal money (but no longer of gold or silver origin) appears when in frequently repeating transactions direct presence of noble metals becomes obligatory. Relying on the power of the state power, it becomes possible to replace gold and silver in circulation, first within the limits of the given state, and then in the world trade with signs of value. Initially, these signs at any time could be exchanged for precious metals at face value, which allowed them to circulate in circulation as a substitute for money made of precious metals.
The importance of state support for symbolic money should be emphasized. In the history of Russia, a vivid example - when the state was unable to guarantee the gold provision of money and abused the trust of the people, thereby actually provoking mass riots - is a copper riot in 1662. Then about 250 people died.
Credit money
The emergence of credit money, as noted earlier, is associated with the development of credit relations, when the purchase and sale are made on credit, with the deferral of payment. Credit money - properly executed securities, most often bills of exchange, cheques, bills of exchange, and now shares. During the global economic crisis of 1929-1933, a system of non-redeemable (gold) credit money was finally formed to replace monometallism. Its characteristic features include the dominant position of credit money, the dismantling of gold, the rejection of the exchange of banknotes for gold and the abolition of their gold content, strengthening the issue of money for the purpose of lending to private businesses and the state, state regulation of money circulation. Such treatment is ensured by the existence of state laws regulating the rules of issue and circulation of promissory notes and banknotes, as well as the rules and procedures of deposit operations, which provide, in particular, for liability for violation of these laws, rules, and procedures.
So: commodity money was replaced by the era of the gold standard, then there appeared symbolic (for example, paper money), but still not credit money. And the development of credit relations has led to a new stage of evolution of money - credit money. Today we can observe a variety of forms of credit money: bank deposits, cheques, traveler's checks, securities market, and other forms. Over the centuries, money has taken different forms, forms have been combined into types of money, and one type of money has been replaced by another. With the transition from one link to another in this chain, the appearance of money became more compact, easier, transaction costs were reduced, and the use of human money became more convenient. The evolution of money and types of money is obvious.