The history of the foreign Exchange market begins with the emergence of money. Money was used as the universal equivalent for different goods and services. The earliest information on money relations appears 4,500 years ago in Mesopotamia (present day Iraq). The archaeological finds prove that people had paid a certain amount of silver for goods and became the start of using coins made of different alloys as a measure of payment. The earliest information on coins appears 3,000 years ago in Lydia( Present day Turkey). Initially, the coins were different shapes, copper plated coins were used in Russia and Italy; Bronze spades and knives were used in china; Silver pieces in boat design were used in Thailand: gold and silver rectangular coins were used in japan.
The system of joint standard dispersed all over the world very quickly. Different alloys were used for making coins in different countries , but gold, silver , bronze and copper were widespread.
Paper money appeared much later on and was first found in china. The Chinese emperor introduced heavy coins of low value in circulation in the 10th century. People were uncomfortable with them and exchanged the coins for receipts indicating the precise value of goods with merchants. One century later the Chinese government withdrew those receipts and ordered to print banknotes in order to use them as legal currency. This was the beginning of paper money.
In the beginning, all banknotes were gold. The gold was kept in banks, and banks paid money for gold. At that time, every person could exchange banknotes for gold and visa versa. The representative banknotes were introduced in order to prevent currency from depreciation. Overtime, it had become clear that there was no need to ensure banknotes with gold by 100 percent.
It is a vey interesting fact that long after paper money had been introduced there were some countries which did not use decimal currency. Traditional denomination which appeared a thousand years ago had been popular in England until 1971
The system of joint standard dispersed all over the world very quickly. Different alloys were used for making coins in different countries , but gold, silver , bronze and copper were widespread.
Paper money appeared much later on and was first found in china. The Chinese emperor introduced heavy coins of low value in circulation in the 10th century. People were uncomfortable with them and exchanged the coins for receipts indicating the precise value of goods with merchants. One century later the Chinese government withdrew those receipts and ordered to print banknotes in order to use them as legal currency. This was the beginning of paper money.
In the beginning, all banknotes were gold. The gold was kept in banks, and banks paid money for gold. At that time, every person could exchange banknotes for gold and visa versa. The representative banknotes were introduced in order to prevent currency from depreciation. Overtime, it had become clear that there was no need to ensure banknotes with gold by 100 percent.
It is a vey interesting fact that long after paper money had been introduced there were some countries which did not use decimal currency. Traditional denomination which appeared a thousand years ago had been popular in England until 1971
