Eureka! Institutional Repository

Modern money began with the practice of sovereign coinage, whose origins go back to the very dawn of civilization. That is to say, coins first appeared in eastern Mediterranean during the eight and seventh centuries B.C. and in Far East in 1022 B.C. Nonetheless, the format of money has changed considerably since then. In particular, the early format was commodity money, for instance minted of base metals like copper or bronze alloy with a metallic content of intrinsic value which had uses other than as a medium of exchange. Yet, the format of commodity-backed or representative money appeared around the eighteenth century; pieces of paper (e.g. gold certificates) were used as a claim on the commodity, promoting portability of money and facilitation of transactions. Nowadays, modern economies are based on fiat currencies - which are defined as any legal tender designated by a central authority that circulates and is customarily used and accepted by the issuing country- and resemble to the aforementioned form of commodity-backed money in terms of appearance, but not in terms of concept. Thus, money as a tool created and marked by development, had been readjusted eventually to society’s evolution, while maintaining three functions: it is performing a function as a medium of exchange (id est as an intermediary in trade and exchange of goods and services), as a unit of account (which stands for the unit of measure used to value/cost goods, services, assets, liabilities, income, expenses) and as a store of value (meaning an asset that can be saved, retrieved and exchanged at a later time, and be predictably useful when retrieved).