What types of money exist in our time and how do they differ

The content of the article

Each working person receives a fee for the services provided in a certain equivalent. It can take various forms, but many citizens, answering what types of money exist in our time, are able to give few examples, talking about electronic wallets, paper bills and gold coins. The listed payment elements make up only part of the economic system and in reality there are much more.

What is the money

This specific product may be full and defective. Some citizens believe that it is more correct to divide money into cash and non-cash, but this is not so. Cash may be defective. Many finances separately consider electronic means of payment, as it is difficult to determine the costs of their production and correlate them with the nominal value.

Full and Inferior

When a product is assigned to one of these categories, its nominal and real value plays a role. If both of these parameters coincide, then money is considered to be full-fledged. If the face value exceeds the cost of producing the goods, then it is considered inferior. Commodity and metal are classified as full-fledged money, and paper and credit money are inferior.

Cash Properties

The essence of the product is always manifested through its characteristics. In the case of money, the main property is their constantly recognized value. The funds have a personal exchange value. Money is considered the most liquid asset. They can always be exchanged for the currency of another state or for securities. They also make demands on the resources used to make money:

  • Safety. Funds must be protected against copying, counterfeiting and denomination.
  • Persistence. The product must not change its physical and other properties during long-term storage.
  • Recognition. Means can be easily identified..
  • Integrity and divisibility. A product cannot significantly change its properties if it is combined into one large part or divided into many small.
  • Homogeneity in quality. Individual copies of coins and notes should not have any unique properties..

Coins and money

What functions in the economy do money

This tool is used to determine the value of commodity resources, which are part of the economic life of society. Due to absolute liquidity, the currency plays the role of the foundation of the economic system of each state. Any kind of money in our time is a universal measure of the value of products and services. The essence of this means of payment is revealed in its five functions:

  1. The measure of value. Used to express the price of all goods and services that are comparable qualitatively and the same quantitatively.
  2. Instrument of payment. The function is performed when receiving goods on credit, paying utility bills, taxes and paying salaries.
  3. Medium of circulation. They simplify the process of exchange and receipt of products.
  4. Means of accumulation and savings. The most convenient form of wealth storage due to high liquidity.

In some sources, the properties of money include their access to the international market. World money becomes when they participate in the circulation of finance between several states. Money used to maintain international economic relations is called currency. It can be foreign and state. The dollar and the euro are very popular in Russia among foreign currencies due to the high exchange rate. Foreign money includes:

  • funds in accounts in monetary units of foreign countries and in international monetary units;
  • banknotes in the form of coins and banknotes, which are legal tender of any state and are currently in circulation.

The main types of money

Throughout history, mankind has used different types of means of payment. The simplest of these were products that the owners exchanged for other goods. The emergence of the concept of commodity money is associated with this moment in the development of the economic system. In the everyday life of financiers, such concepts as fiat, credit, secured, full and inferior money often appear. All of them are types of means of payment used to pay for services, purchase products and repay loans..


Under the category of funds means real products that have their own value and usefulness. They are classified as full money. Such products include all types of products that played the role of equivalent in the initial stages of trade development (grain, fur), and metal coins. The use of the latter type of commodity currency continues to this day..

Metal coins


Paper rubles, euros and dollars belong to this category of cash. A great feature of fiat money is its real value is much lower than face value. They have no value, they are issued by the state, but they are considered legal tender of any country on its territory. Fiat money can be made in the following forms:

  • paper banknotes;
  • cashless (in bank accounts).


Issued in the form of banknotes that cannot be exchanged for gold, and in the form of bank deposits. From a legal point of view, these documents allow the owner to demand debt from the debtor, even in cases where he was not a creditor. This form of payment can be used to repay your own loan obligations or to purchase any product. Debt is paid on time indicated on paper.


Their role is played by certificates or certain signs that can be exchanged for a fixed amount of products. In practice, secured money becomes representative of commodity money. At the first stages of the development of trade relations, they were used as confirmation of the buyer having full-weight coins. After the abolition of the gold standard, such banknotes are no longer in use.

Types of money in the modern world

The progress of society does not stand still. One era is replaced by another, and new means of payment are periodically introduced into economic systems. If you ask the bank about what types of money exist in our time, then a specialist will definitely report on metal, paper and credit means of payment. They differ not only in the form of production, but also in the concentration of value.

Paper money


The appearance of these means of payment is associated with the special properties of the material from which they are produced. Gold and silver, even when transported over long distances, do not change their properties. Based on these properties, it was decided by states that coins should be minted in institutions. The role of metallic money has increased dramatically since the start of the demonetization of gold. This metal was gradually removed from the international economic system..

Coins can be bimetallic or made entirely from one material. Modern metal currency is made from cupronickel, copper, steel and brass. All gold coins were taken out of circulation. On the reverse, the face value is more often depicted, and on the obverse – the state emblem. After the gold is withdrawn from circulation, copper is added to the coins to achieve a saturated yellow tint.

Types of Paper Money

Symbolic means of payment used in all countries of the world. Approximately 70% of Russian citizens, when asked what types of money exist today in paper form, will begin to transfer all denominations of rubles. Such an answer will not be correct. Paper money refers to all funds having a value much lower than their own face value. Their list includes:

  • banknotes;
  • Checks
  • treasury tickets;
  • bills;
  • bonds;
  • other types of securities.

The latter category includes legally certified securities confirming the owner’s property rights to certain resources. This can be a certain amount of money or some kind of account number. Securities are available for circulation, documented, standardized, liquid and always recognized by the state. If necessary, the owner can sell them and receive remuneration in foreign or domestic currency.

Treasury tickets

The production of this form of money was dealt with by the Federal Treasury. By their signs, they completely coincide with bank notes. Treasury bills along with rubles were widely used in the USSR. They could be issued as a salary. After the formation of the Russian Federation, for the first 3 years, citizens were assisted in the exchange of treasury bills for traditional state currency.

Bank notes

The first paper money introduced in countries instead of coins from precious metals. In some sources, this term means a contract that involves the transfer of money, jewelry or securities from one participant to another transaction. In the world, their release ceased by 1823. Used bills were withdrawn, giving in exchange paper currency or other goods that the holder of the document under the contract should have received.

Bank notes

Modern credit money

Commercial organizations not only act as intermediaries in transactions, but also provide financial assistance to the population. It is difficult not to mention credit means of payment, considering what types of money exist in our time. In short, they represent debt obligations that must be implemented on time. These include:

  • Checks
  • bills;
  • cash notes.


This security is executed in the form of a debt obligation in writing. The essence of the document is ordinary. The debtor undertakes to pay the amount specified in it to the bill payer, but strictly on a specific date and in a fixed place. A bill can be one of 4 types – bank, treasury, simple or transferable. The main feature is the service of most of the wholesale trade. Repaid the balance of mutual claims by paying cash.

Cash notes

All credit funds are issued by the central banks of the country. Initially, such money was doubly secured – they had a commercial and gold guarantee. The main difference between a banknote and a bill is that it has an unlimited form, that is, an unlimited period of time is valid. Nuances:

  1. The collateral function lies with the country’s central bank.
  2. During the development of the banknote, two types of collateral were lost immediately..
  3. Today, banknotes come into circulation in several ways – by exchanging foreign money for the banknotes of their country, through commercial banks or state financial-credit institutions.
  4. They are used in various fields of human activity, and do not apply to special currency.

Cash notes


This document is an order from the bank account holder to transfer a certain amount to the bearer of the check. For full check circulation, a contract is drawn up between the lender and the client, where the total amount of the loan is agreed. All checks differ in their characteristics and are of several types: registered, order and bearer. The last type can be brought to the bank to receive money.

Credit and payment plastic cards

Under the leadership of the central bank, financial institutions are developing payment products. Credit card is designed to carry out operations on borrowed funds. By its properties, a credit card is almost the same as a loan. The main difference is that the funds can be used as necessary, while interest is accrued only on the amount that was actually used.

Credit cards are reusable, that is, after repayment of the taken amount, you can again use credit funds. Moreover, for periods when credit funds are not used and there is no debt on the account, commissions are not charged (except for the payment of additional services, for example, a mobile bank). Payment plastic cards are intended for transactions using the money already in the account.

Electronic cash and electronic means of payment

Professionals who answer the question of what types of money are always mention the finances used on the Internet. The electronic money list includes not only the money of certain states located on the customers’ bank accounts, but also cryptocurrencies that are not related to any country. They are settled in the same way as standard banknotes. Electronic funds meet the following criteria:

  • stored on electronic media (card or bank account);
  • accepted for payments by other organizations except the bank that issued them;
  • produced in the same amount as the amount sent by a specific person to the bank.

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