The evolution of China’s currency is still quite complicated, let’s look at it one by one. The earliest currency in China is physical currency. Any physical object can be used as currency, mostly in barter. Shell coins are a recognized and widely used currency. During the Warring States Period, various countries introduced different currency systems. Knife coins, cloth coins, ring coins, etc. appeared one after another. After Qin Shihuang unified the six countries, he abolished the original currencies of each country and achieved currency unification. During the reign of Emperor Wu of the Han Dynasty, the longest-used currency in history, the five-baht coin, was introduced. It was used until the Tang Dynasty and was changed to Kaiyuan Tongbao coin. After that, copper and iron coins and banknotes that are still widely used appeared. In the Qing Dynasty, silver began to be used as the main currency.

The prototype of currency was a necessity for exchanging goods. With the development of human civilization, currency has been updated many times, from various physical objects to designated items. In the early days, various agricultural tools, Grain, cotton, etc. have all been used as currency. There was no concept of currency at that time. We just got what we wanted in the form of barter. Some items cannot be used for a long time, such as grain moldy, agricultural tools will be damaged, and they cannot be better. The exchange gradually developed into a later currency.

1. The five basic functions of money

(1) The five basic functions of money are: value scale, means of circulation, means of storage, means of payment and world currency Five basic functions.

(2) Value scale - the function of currency to express the value of commodities and measure the value of commodities. Currency performs the function of value standard, expressing the value of all commodities as a certain amount of money. This is because money itself is also a commodity and has value.

(3) Means of circulation - In the circulation of commodities, currency functions as a medium of exchange for commodities. The function of currency as a means of circulation is developed in the exchange of commodities. Before the emergence of money, commodity exchange took the form of direct barter exchange. , means of storage - the function of currency withdrawing from the circulation field and being preserved as an independent value form and a general representative of social wealth.

(4) The function of currency storage means is gradually improved in practice. With the development of commodity production, commodity producers can purchase commodities to maintain production and life at any time, and currency hoarding mainly manifests as hoarding to obtain exchange value.

(5) Means of payment - the function performed by money as an independent form of value during unilateral movement. The function of currency as a means of payment was originally developed to meet the needs of commodity production and commodity exchange. Since the production cycles of different commodities vary in length and the distance between the place of production and the place of sale varies, in order to ensure the continuity of the reproduction process, some commodity producers have the need to sell goods on credit.

(6) World currency - currency as a general equivalent in the world market. With the emergence and development of international exchanges, currency circulates in the world market and has the function of world currency.