The paper money we use today originated during the middle ages. In those days, goldsmiths and merchants trading with gold and silver items, kept the values related to these items. The goldsmith, as a guaranty, delivered a receipt to the merchant. With time, these receipts were used to make payments, circulating from hand to hand.
The first bank notes were issued by Banco do Brasil in Brazil in 1810. They had its value written by hand, as we today do with our checks. With time, in the same form it happened with coins, the government came to conduct the issue of notes, controlling counterfeits and securing the power to pay. Currently, all countries have their central bank in charge of issuing coins and notes.
Paper money experienced an evolution regarding the technique used in their printing. Today, the printing of notes uses a specially prepared paper and several printing processes, which are complementary to each other, assuring to the final product a great margin of security and durability conditions.
The set of coins and bank notes used by a country form its monetary system. The system is regulated by appropriate legislation and organized from a monetary unit, its base value. The countries, through their central banks, control and guarantee the issue of money. The set of notes and coins in circulation, the so called monetary mass, is constantly renewed through the process of sanitation, substitution of worn out and torn notes
As coins and notes ceased to be convertible into precious metal, money became more dematerialized and assumed abstract forms. One of these forms is the check that, for simplicity of use and security offered, is being adopted by an increasing number of people in their day-by-day activities. This document, by which one orders payment of a certain amount to its bearer or to a person mentioned in it, aims mainly at transactions with bank deposits. The important role played today in the economy by this form of payment is due to the innumerable advantages offered by it, speeding transactions with large sums, avoiding hoarding and diminishing the need of change by being a document completed by hand in the necessary amount.
The need now came for people to
Electronic money, or e-money, is the money balance recorded electronically on a stored-value card. These cards have microprocessors embedded which can be loaded with a monetary value. Another form of electronic money is network money, software that allows the transfer of value on computer networks, particularly the internet. Electronic money is a floating claim on a private bank or other financial institution that is not linked to any particular account. Examples of electronic money are bank deposits, electronic funds transfer, direct deposit, payment processors, and digital currencies.
Electronic money can either be centralized, where there is a central point of control over the money supply, or decentralized, where the control over the money supply can come from various sources. Electronic money that is decentralized is also known as digital currencies. The major difference between E-money and digital currencies is that E-money doesn’t change the value of the fiat currency (USD, EUR) it represents, but digital currency isn’t equivalent to any fiat currency. In other words, all digital currency is Electronic money, but Electronic money isn’t necessarily digital currency. Many mobile sub-systems have been introduced in the past few years including Google Wallet and Apple Pay.
Money, whatever the form it has, is not valuable for itself, but for the goods and services it may purchase. It is a sort of security giving its bearer the faculty of being creditor of society and take advantage, through his or her purchasing power, of all conquests of modern man. Money was not, hence, invented by a stroke of genius, but stemmed from a need, and its evolution reflects, at each time, the willingness of man to harmonize its monetary instrument to the reality of its economy.