A few days ago we learnt that the Government of India had decided to phase out the 25 paise coin. This means that the coin can no longer be used in India to buy things.
We then thought, it may useful and interesting to look at money or currencies (notes and coins) used around the world, and find out how people started using money as a way to buy and sell goods.
The Story of Money
A few thousand years ago, humans lived in small groups in areas where food and water were easily available. There were no ‘pucca’ houses, no roads, large cities or means of transport. These were early humans who hunted animals for food. In such groups there was no buying and selling – instead people shared whatever food they had hunted or gathered.
Slowly over time, people also began to exchange goods – this is called barter or trade. For example a woman who had gathered a basket of ripe fruit may have exchanged them for meat from a hunter.
The problem with this trade system was that you had to find someone who had something that you wanted (like the woman who wanted meat and found the hunter in the example above). Then that person also had to want what you were offering.
How coins and notes began to be used
To solve this problem people decided to use a separate object that could be used to measure the value of things. In olden times in India and China, people used shells. In some parts of central Europe, people even used horses as a form of money.
Over time, as people discovered the use of metals, coins began to be used. Coins replaced things like shells because they were made of stronger material and could last longer.
Over time, as people began to use banks for storing their money, banks started issuing (publishing, creating) bank notes or currency notes that were used to buy and sell things.
Today every country has its own currency. These currency notes and coins have pictures of their leaders or of important places in that country.
The Indian Rupee
In India we use a currency called the Rupee. India was one of the earliest countries in the world to use coins as money. The word Rupee comes from the Sanskrit (an ancient Indian language) word ‘rupyakam’ which means silver coin.
The Rupee was introduced by a great king of India called Sher Shah Suri around 500 years ago. Then, when the British ruled India, they started issuing (creating) bank notes with the picture of England’s king or queen on them.
After India became independent, Mahatma Gandhi’s picture started appearing on the notes. Today, Rupee notes and coins are issued by the Reserve Bank of India, which is the main bank owned by the Government of India.
Last year, for the first time, the Indian Rupee was given a symbol (see picture to the right). The symbol is based on the Hindi letter for the sound ‘r’ as well as the English letter ‘R’.