Currency system
AROUND THE WORLD
Savira Auliyah
Throughout the history of civilization, human economic activity has developed in many profound and vast ways, evolving from the simple trading method known as barter to a more refined system entailing the use of currency. Different civilizations from the various groups of society were known to have created and developed their unique trading systems. The further we delve into the history of economic systems, the more complex we’ll find it to be. Let us go back in time to see our achievements regarding the currency system. Here are five facts about currency from societies around the world.
1
The world’s first known currency is the Mesopotamian shekel. Mesopotamia is a historical region in Southwestern Asia that now covers present-day Syria, southeastern Turkey, and most of Iraq (Edzard, n.d.). The shekel is estimated to have emerged 5,000 years ago, while the earliest known mint in Asia Minor itself dates back to 650 to 600 B.C. At that time, the elites of Lydia and Ionia used stamped silver and gold coins to pay their armies (Kusimba, 2017).
2
British Pound Sterling (GBP):
The World’s Oldest, Still-Operating Currency
The British pound is the world’s oldest currency that is still in use today. It emerged in 800 CE and was used in the Anglo-Saxon era (Parker, 2016). In 1489, the pound coins started to be utilized. In 1660, coin minting was finally mechanized with some advanced features, such as side lettering intended to avoid money-clipping. As of 1694, the pound notes started to circulate in the English society after the establishment of the Bank of England - these notes were originally handwritten. In 2002, the United Kingdom decided to maintain GBP as its national currency, although other member states of the European Union decided that the Euro would be the shared currency for other EU states (Corporate Finance Institute, n.d.).
3
The Kuwaiti Dinar is currently the world’s highest rated currency.
Source: https://foreigncurrencyandcoin.com/produ 1
The Kuwaiti dinar was first introduced in 1961 as a replacement for the Gulf Rupee, in the same year when Kuwait gained its independence from the United Kingdom. As of May 2019, 1 Kuwaiti dinar is approximately worth 3.29 United States dollars, asserting its place as the most valuable money on earth (Mitchell, 2019). This value is retained even today, with data provided by Morningstar, Inc. showing that it is worth 3.32 USD as of July 18th, 2021.
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However, considering the fact that Kuwait’s economy is booming from its oil industry, this fact shouldn’t come off as much of a surprise. Kuwait’s economy started to thrive during World War II when the country became a major world supplier of oil. Currently, the oil industry accounts for one-third of the country’s GDP and still provides 80% of the country’s tax revenue. By 2020, Kuwait’s per capita income reached USD 80,000 (Corporate Finance Institute, n.d.).
4
Romania’s 10-Bani: The World’s Smallest Banknote
Source: https://www.banknoteworld.com/bl 1
Romania printed the 10-Bani after World War I by the Romanian Ministry of Finance in 1917 to replace small coins. The reverse side features the coat of arms of Romania (Banknote World, 2020). The size of the banknote measures up to 2.75 x 3.8 cm, slightly larger than 1 square inch. This is approximately one-tenth the size of a 1 dollar banknote (Guinness World Records, n.d.). Additionally, the 10-Bani features the King Ferdinand of Romania, who ruled from 1914 to 1927. Although the banknote is not in circulation today, the notes are still often purchased by collectors to add to their collection of old currencies.
5
The US once had a 100,000-dollar bill
Imagine being able to fit US$100,000 into your pocket! Well, Americans living in 1934 - at least, those working within federal reserve banks - could do just that. The US printed a 100,000-dollar banknote with a picture portraying President Wilson. This bill was a part of the 1934 gold certificates series, and was not publicly circulated as it was only used for official transactions between federal reserve banks. It was printed by the US Bureau of Engraving and Printing for only a short period of time, from December 18, 1934, to January 9, 1935 (U.S. Department Of The Treasury, 2014).
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Taking into consideration the aforementioned facts, it is evident that currency systems have played a significant role in the development of society for an extended period of time, and that a great path of economic revolution has led us to where we are right now. Humans no longer have to engage in bartering over items that may not necessarily hold equal value, nor do we have to bring piles of money to buy a house or groceries. All of this can be done by a simple bank transaction - another piece of evidence displaying the evolution of currency. Considering the current trends within the financial industry, it is simply difficult to rule out the possibility that the technological revolution will bring us to simpler and more convenient ways of exchange.
References
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Bank NoteWorld. (2020, September 2). Largest and Smallest Banknote Sizes. https://www.banknoteworld.com/blog/largest-and-smallest-banknotes/
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Corporate Finance Institute. (n.d.). Kuwaiti Dinar. https://corporatefinanceinstitute.com/resources/knowledge/finance/kuwaiti-dinar-kwd/
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Corporate Finance Institute. (n.d.). Pound Sterling. https://corporatefinanceinstitute.com/resources/knowledge/finance/pound-sterling-gbp/
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Edzard, D. O., Frye,. Richard N. and Soden, . Wolfram Th. von (n.d.). History of Mesopotamia. Encyclopedia Britannica. https://www.britannica.com/place/Mesopotamia-historical-region-Asia
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Guiness World Records. (n.d.). Smallest Money Paper. https://www.guinnessworldrecords.com/world-records/smallest-paper-money
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Kusimba, C. (2017, June 20). When and Why did people first start using money?). The Conversation. https://theconversation.com/when-and-why-did-people-first-start-using-money-78887?xid=PS_smithsonian
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Mitchell, C. (2019, June 25). KWD (Kuwaiti Dinar). Investopedia. https://www.investopedia.com/terms/k/kwd.asp
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Parker, C. (2016, June 27). A Short History of The British Pound. World Economic Forum.
https://www.weforum.org/agenda/2016/06/a-short-history-of-the-british-pound/
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US Department of Treasury. (2014, August 8). Denominations. https://www.treasury.gov/resource-center/faqs/Currency/Pages/denominations.aspx