Usually, each country uses only one currency, which is issued and controlled by the central bank. But there are exceptions Many countries can use the same currency, such as the euro commonly used in the European Union, the French franc commonly used in West Africa, and the equivalent currencies with different names in the Latin Union of19th century, which can circulate freely within the Union. A country can choose the currency of another country as its legal tender. Panama, for example, chose the US dollar as its legal tender. The currencies of different countries may also use the same name. For example, before France and Belgium used the euro, they and Switzerland were both called francs. Sometimes, due to special reasons, different local governments in the same country may issue different versions of money. For example, in Britain, including England, Scotland and even remote islands such as Jersey and Guernsey, there are different versions of the pound, which can be traded with each other in other parts of Britain. However, only the British pound is an internationally recognized trading currency, and other versions of the British pound may be rejected after being taken out of the UK.

Each basic monetary unit can usually be divided into smaller tokens. The most commonly used ratio is1100, such as100 integral = 1 yuan. The decimal system of 12/20 is used in British history. 12p is 1 shilling, and 20 shillings is 1 pound. The ratio of110 or11000 has also been used. Some countries do not have coins, or although there are coins, because the currency is too small, it is only a theoretical conversion unit, and no real currency, such as Japanese yen and Korean won, is issued.

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history

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barter

The history of human use of money began from the earliest era of material exchange. In primitive society, people bartered for the materials they needed, such as a sheep for a stone axe. But sometimes limited by the types of materials used in the exchange, we have to find a mutually acceptable item for exchange. This article is the most primitive currency. Livestock, salt, rare shells, rare bird feathers, precious stones, placer gold, stones and other items that are not easy to obtain in large quantities are used as money.

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metal currency

After years of natural elimination, copper coins are gradually replaced by metals in most societies. The advantage of using metal currency is that its manufacture requires manpower, it cannot be obtained in large quantities from nature, and it is easy to preserve. Rare gold, silver and copper, which are difficult to smelt, have gradually become the main currency metals. Some countries and regions have already used iron currency.

The early metal currency was huge, so it needed to be tested by touchstone and weighed at the same time. With the development of human civilization, a more complex and advanced monetary system has been gradually established. People in ancient Greece, Rome and Persia minted coins with uniform weight and color. In this way, when using money, it is undoubtedly much more convenient to weigh and check the color. These coins are printed with the head of the king or emperor, complicated heraldic and seal patterns to avoid counterfeiting.

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Gold and silver

Coins in western countries are mainly gold coins and silver coins, and auxiliary coins are made of copper and copper alloys. With the development of social economy in Europe, the volume of commodity transactions has gradually increased. In the15th century, deflation panic appeared in economically developed Flanders and northern Italian states. From the16th century, a large amount of gold and silver from America flowed into Europe through Spain, which saved the European monetary system and created the initial conditions for the development of European capitalist economy.

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banknote

With the further development of economy, it is inconvenient to use metal currency. Large transactions require the use of a large number of metal coins, the weight and volume of which are annoying. There will be wear and tear in the use of metal currency. According to incomplete statistics, since humans used gold as money, more than 20,000 tons of gold have been worn in mint, or in people's hands, money bags and clothes pockets. So paper money appeared as a symbol of metal money. The earliest paper money in the world appeared in Sichuan, China in the Song Dynasty.

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gold standard

The original paper money is based on gold, which can be freely exchanged with gold, and both can be circulated at the same time, and the circulation of paper money is relatively small. By the end of 19, the capitalist economy had an unprecedented expansion and development, so paper money gradually became the main currency in circulation, but they still had gold as the guarantee for distribution. This monetary system is called the "gold standard".

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Currency anti-counterfeiting

The problem of counterfeiting currency appears together with the monetary system. In the era of using metal currency, the method of counterfeiting is to mix cheap metals such as copper and lead into gold coins. At that time, the only way to deal with this kind of crime was to use heavy punishment once it was discovered, so as to deter counterfeiters.

Paper money is easier to forge. After the French Revolution, bonds mortgaged by confiscated church property were issued as alternative paper money. In order to destroy the French economy, the British government once forged this currency (and stipulated that private counterfeiting of French paper money would be sentenced to death). This is also one of the earliest economic wars. During World War II, Germany forged a large number of British and American banknotes in concentration camps. Records of counterfeit banknotes by private individuals or criminal organizations are also endless. In order to avoid counterfeiting, many anti-counterfeiting measures have been taken: special paper, offset printing, watermark, magnetic ink, metal security thread, ultraviolet fluorescent label, color-changing ink, reverse printing of patterns (this technology is the most striking in French francs) and so on. Australia, New Zealand and other countries have also issued plastic money.

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Modern currency

Under the gold standard, the currency exchange rate between countries that implement the gold standard is determined according to their respective gold content ratio-gold parity. This system is based on the free flow of gold. After the outbreak of World War I, Britain, France, Russia, Germany, Japan and other participating countries banned the export of gold, and the gold standard system actually collapsed.

After the First World War, the currencies of Germany, Austria and other countries depreciated sharply. Since then, there has been no fixed exchange rate basis between national currencies. According to 1944 Bretton Woods Agreement, the currencies of IMF member countries should be linked to gold or US dollar and exchanged at a fixed exchange rate. This agreement established the international monetary status of the US dollar, and the monetary system of various countries thus established was called the Bretton Woods system. 1971August, the dollar stopped being freely convertible with gold, and the Bretton Woods system collapsed. Since then, it has entered the era of symbolic currency. Since then, floating exchange rates have been implemented among countries. Some currencies that are relatively stable or have appreciation potential, such as Swiss franc, German mark and so on.

The International Organization for Standardization (ISO) has designated a three-letter symbol system to represent the currencies of different countries. The code name of this standard is ISO 42 17.

In the currency exchange rate table, we can see the exchange rate changes between currencies in the world in recent years.

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Five functions of money

Because money is a commodity, it has the same use value and exchange value as all commodities. In different forms of value movement, money plays different roles: value scale, circulation means, payment means, storage means and world currency. Among them, value scale and circulation means are the basic functions of money. The other three functions are all derived from these two.

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measure value

The measure of value is the direct embodiment of money as social labor. As a commodity, money itself can be compared with other commodities. At this time, the value form of commodities is transformed into the price form, and the value form of commodities through money is the price. When carrying out the function of value scale, money only needs to exist in the form of imagination or concept, but its unit must depend on the currency circulating in reality. It is precisely because of the value scale function of money that people can first convert different forms of goods into the price form of money, and then exchange with other goods. As a commodity, money itself has quantitative differences between different currencies, so people have also formulated a quantitative standard for money, that is, the prescribed price standard (sometimes called price scale). The system is a monetary unit, which contains a certain metal weight and its equivalent.

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currency

After the currency realizes the means of circulation, it makes it possible to exchange goods. Circulation means is the development of the function of monetary value scale. The emergence of currency makes the exchange between commodities have a direct barter exchange, which has become an exchange with money as the medium. That is, from commodity-commodity to commodity-currency-commodity. They are not only different in form, but also different in nature.

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The currency of China

China's ancient monetary system was based on copper coins. The early forms of money have not yet been discovered. The original copper coins had various shapes, including knife coins, cloth coins and ant nose coins. After Qin Shihuang unified China, he ordered the national copper coins to be based on Qin copper coins. Because the sand mold is used to pour copper coins, the cast copper coins have burrs, so there is a square hole in the middle, which is used to connect wooden sticks in series to polish and file. This special shape gives it many symbolic and mysterious explanations. Some people think that the circle of copper coins represents "heaven" and the square hole in the center represents "earth". Copper coins are usually printed with the emperor's year number when casting.

Gold coins were rare in ancient China. During the Spring and Autumn Period and the Warring States Period, the State of Chu in the Yangtze River valley in the south of China once used gold cakes and nuggets. But in other regions and dynasties, gold was mainly used for decoration and preservation. In the second century BC, Emperor Wu of the Western Han Dynasty issued white deerskin coins to reward nobles and military generals. In addition to copper coins, cotton cloth, silk, rice and other daily necessities are also used as the unit of calculation of money (rather than actual money) to pay the salaries of bureaucrats and the army. After the Tang Dynasty, silver currency gradually spread widely. Although the silver in the national treasury and the official treasury is cast into ingots according to the uniform color and weight for storage, the silver in circulation is not coins, but one by one. When it is used in the market, it has to go through complicated procedures such as calculating color and weighing. Large pieces of silver ingots should be cut with clips, and small pieces of silver ingots need to be recast into large pieces at the silversmith's place. There are many reasons why China doesn't use silver coins, but the main reason is that the government can't provide guarantee for the silver coins issued due to political instability, and at the same time, due to frequent wars, people often hoard silver, which leads to insufficient market circulation to support the silver-based monetary system.

Because it is extremely inconvenient to carry a large number of copper coins, cross banknotes appeared in the highly developed Northern Song Dynasty. This is also one of the earliest paper money in the world. But it's more like a money order than paper money in the modern sense. The Yuan Dynasty established by Mongols followed paper money and regarded it as one of the wonderful ways to solve economic difficulties. Regardless of the actual currency circulation and economic level, they issued a large number of unsecured paper money, which caused the earliest inflation. The Yuan Dynasty was replaced by the Ming Dynasty established by the Han people. Its founding emperor Zhu Yuanzhang was a conservative agronomist. He thinks that paper money is foreign and should be discarded. However, the paper money issued by the Ming Dynasty itself is called "Daming Treasure Note". This kind of paper money is rarely used among the people.

In the middle and late Ming Dynasty, silver began to flow into China in large quantities, becoming a metal currency as common as copper coins. During the Qing Dynasty, silver had become the main monetary unit ("two") of the country. At the end of the Qing Dynasty, Mexican silver dollars began to circulate in large quantities in China. During the reign of Emperor Guangxu, China minted his own silver coins and set up a family bank to issue regular paper money. 1935, China implemented the legal currency system and officially abolished the silver standard system. According to the Sino-US Silver Agreement of 1936, one yuan of legal tender is equal to 0.265 US dollars.

Chinese mainland's current currency, RMB, is a symbolic currency.