May 31, 2023


The history of currency dates back to 40,000 years ago, and human beings have been using it ever since. The forms of currency have changed throughout history, from natural objects to coins, paper, and digital versions. Anthropologists and archaeologists have made discoveries of ancient currency in the field, which provides insight into the evolution of currency in human civilization and trade and interaction between far-flung groups.

The origin of money has many functions: it facilitates exchange as a measure of value, it brings diverse societies together by enabling gift-giving and reciprocity, it perpetuates social hierarchies, and it is a medium of state power. Evidence suggests that interactions involving currency of various kinds emerged from gift exchanges and debt repayments.

Objects that occurred rarely in nature and whose circulation could be efficiently controlled emerged as units of value for interactions and exchange. These included shells such as mother-of-pearl that were widely circulated in the Americas and cowry shells that were used in Africa, Europe, Asia, and Australia. Native copper, meteorites or native iron, obsidian, amber, beads, copper, gold, silver, and lead ingots have variously served as currency. People even used live animals such as cows until relatively recent times as a form of currency.

The Mesopotamian shekel – the first known form of currency – emerged nearly 5,000 years ago. The earliest known mints date to 650 and 600 B.C. in Asia Minor, where the elites of Lydia and Ionia used stamped silver and gold coins to pay armies. Coinage as commodity money owes its success largely to its portability, durability, transportability, and inherent value. Additionally, political leaders could control the production of coins – from mining, smelting, minting – as well as their circulation and use.

Throughout history, money has acted as a record, a memory of transactions and interactions. In the past, as today, no society was completely self-sustaining, and money allowed people to interact with other groups. People used different forms of currency to mobilize resources, reduce risks, and create alliances and friendships in response to specific social and political conditions.

For example, Americans who lived in the Early Formative Period dating from 1450 to 500 B.C. used obsidian, mother-of-pearl shell, iron ore, and two kinds of pottery as currency to trade across the Americas in one of the earliest examples of a successful global trade. The Maritime Silk Road trade, which occurred between A.D. 700 to 1450, connected Europeans, Asians, and Africans in a global trade that was both transformational and foundational.

Archaeological discoveries provide evidence of market economies based on cash money that were developing at this time. Archeologists discovered a 600-year-old Chinese Yongle Tongbao coin at the ancient Kenyan trade port Manda, in the Indian Ocean. This coin was issued by Emperor Yongle of the Ming Dynasty. He was interested in political and trade missions to the lands beyond the South China Sea and sent Admiral Zheng He to explore those shores, nearly 80 years before Vasco da Gama reached India from Portugal.

The discovery of hordes of coins of lead, copper, silver, and gold all over the globe suggests that coinage – especially in Europe, Asia, and North Africa – was recognized as a medium of commodity money at the beginning of the first millennium A.D. The wide circulation of Roman, Islamic, Indian, and Chinese coins points to premodern commerce (1250 B.C. – A.D. 1450).

Money soon became an instrument of political control. Taxes could be extracted to support the elite, and armies could be raised. However, money also had the power to stimulate trade and commerce, leading to the growth of cities and the emergence of new classes of merchants and traders. Over time, the use of money became more widespread, leading to the creation of central banks and the establishment of national currencies. Today, money plays a vital role in our global economy, facilitating transactions and allowing us to exchange goods and services across borders. However, it is important to remember that money is a human invention, and as such, it can be subject to manipulation and abuse. It is up to us as a society to ensure that money is used in a way that benefits the greater good, rather than serving the interests of a select few.

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