Evolution of Money

Stages of Evolution of money:
The following are the stages of evolution:

1. Commodity money Stage: It is the earliest form of money. Initially, a large number of commodities such as skis, arrows, cattle, wheat, rice etc. have served as money.
2. Metallic Money Stage: Commodity money was replaced by metallic money, particularly gold and silver.
3. Coins Stage: Coins was the first great invention in in the evolution of money. It is believed that first coins were stuck in the 11th Century BC in China. For a long period of time full bodied coins, particularly of gold and silver, served as money. Now all coins of different metals are only token coins.
4.  Paper Money Stage: With the increase in population and expansion of trade and commerce next development in the history of money is paper money.
5. Credit Money Stage: The fifth stage in the evolution of money is the credit money. Credit money includes bank draft, bills of exchange, cheques, promissory notes,. These instruments are being used as money. Credit money has made the developed countries of the world to adopt credit money system instead of other forms of money.
6. Plastic Money Stage: The last and final stage in the evolution of money is the plastic money. Plastic money is the most modern form of money.Plastic money consist of credit cards and debit cards issued by commercial banks. Now-a-days credit cards are being used widely for the purchase of necessities of life.