The forms of money

Money has different forms over time and space. The form of money in the economic sense must be understood to mean the type of material goods which fulfils the function of money at the appropriate level of economic and legal development of society (Fig. 6).

The prevalence of and demand for one form of money or another is defined by indicators such as negotiability, convenience, portability, durability, divisibility, demand, and sufficient amount in circulation.

It is necessary to point out the following basic forms of money which arose in the process of evolution:

1. natural money:
   • non-standardised goods including metals by weight (commercial metals);
   • precise-weight metal ingots;
2. credit money:
   • commercial bills;
   • banknotes of private banks;
   • currency:
     • cash currency:
       • state banknotes (treasury notes) backed by metal;
       • state banknotes (treasury notes) not backed by metal;
       • coins with nominal value;
     • non-cash money — deposit money (checkable accounts);
3. financial money:
   • "quasi-money;",
   • stock which fulfils the function of money to a limited extent.

These forms sprang up successively, as a rule, and were prevalent in certain periods of time (Table 3). New forms of money arose primarily because it was necessary to minimise trading costs and to accelerate accounting and trade operations (Fig. 7).