A brief history of money from ancient times to the present day

Paper will endure everything The first paper money is believed to have appeared in China in the 8th-9th centuries AD, when the so-called Dark Ages continued in Europe. As a result, European countries came to the idea of ​​banknotes in their own way, the route of which is indicated by the very word "banknote", literally - a bank record. The cradle of banking in Europe was Italy, which was located in a strategically advantageous location in terms of the intersection of trade routes. Since, as mentioned above, there was a great variety of different coins in the Middle Ages, the business of money changers began to flourish in Italian cities, whose shops (in Italian “banco”) were located in shopping areas and market squares.

In addition to exchanging money, bankers provided services for storing capital and making payments: the banker accepted money and issued a receipt instead, according to which it was possible to receive cash. Thus, the first banknotes were literally records on paper that a person kept a certain amount of coins in such and such a bank. Strictly speaking, they were not so much money as a document that allowed them to be received. The next step was the targeted printing of banknotes by banks in an amount corresponding to the number of coins held by a particular financial institution. The first central bank in the world was the Bank of Sweden, founded in 1668.

In Russia, the printing of paper banknotes began a hundred years later, during the reign of Catherine II. Of course, for a long time, the broad masses of the population were skeptical about paper money, preferring full-weight coins. States also considered silver, and then gold, to be real money. The relationship between paper and metal was not easy, the peak of the dominance of the latter was the era of the gold standard, which was opened by the Bank of England, which announced in 1821 that the pound sterling would be freely and without restrictions convertible into gold.

The gold standard was later introduced by the United States, Russia and a number of other countries, whose currencies since the introduction of the standard have been exchanged for each other at a fixed rate based on the price of these currencies per unit mass of gold. The system, on the one hand, made it possible to increase the stability of national currencies, on the other hand, it did not allow paper money to be printed in the quantities that the economy needed. It also turned out to be too difficult to maintain the parity of the exchange rates of gold currencies, and as a result, the paper won the victory. The Bretton Woods Agreement of 1944 approved the “gold-dollar standard” (currencies are pegged to the dollar, and it is pegged to gold), and in the 1970s, the leading countries began to massively switch to floating exchange rates. Paper money not only got rid of gold, but actually took over the banner of “real money” from it. There was a so-called demonetization of gold, which has now become a common commodity.