Central Banking Notes

Certain goods gained wide acceptance as a medium of exchange due to their usefulness, beauty, scarcity, and rarity.
Examples:
- Non-Metallic: Rice, corn, wheat, salt, tea, cattle
- Metallic Money: Gold, silver, copper
Intrinsic value (material value) equals its monetary value.

Money that could be Eaten:
- Corn in Mexico and Central America.
- Rice in Japan and the Philippines.
Money for buying a Wife:
- 10,000 coconuts in South Sea Islands.
Salt Money:
- Salt was used as money in the Early Roman Empire.
Living Money:
- Slaves were used as money in Egypt (referred to as "payment in kind" in England).
- Tea was used as money in China.
- Cattle was used as money in Greece.

Money originates from the Greek word “Moneta.”
Anything used as a medium of exchange, widely accepted for payment of goods, services, debts, and obligations within a specific region, irrespective of the credit standing of the person offering it.

State Theory of Money: Money is defined by law.
Purchasing Power: Money's ability to command goods and services.
Money gains general acceptance through its use and acceptance. / Money per se is not money ^^

Law gave money Legal Tender Power, mandated by law, makes money acceptable for all kinds of services.

Any form of money legally acceptable for all forms of obligations.
In the Philippines, notes and coins issued by the Bangko Sentral ng Pilipinas (BSP) are considered legal tender.

As a Medium of Exchange:
- Money serves as a common tool for exchange.
As a Standard Unit of Value:
- Money is a measuring device for expressing the value of goods and services, standardizing their value.
As a Standard of Deferred Payment:
- The same money used for exchange can be used to pay debts and obligations.
As a Store of Value:
- Money can be kept or stored for future use.

General Acceptance:
- Accepted by anyone in exchange for goods and services.
Stability:
- Value should remain constant and not be susceptible to fluctuations, devaluation, or inflation.
Portability:
- Money should be lightweight for easy transport.
Cognizability (Clearly Identifiable):
- Design should be aesthetically pleasing and difficult to counterfeit.
Durability:
- Money must withstand wear and tear over a long period.
Divisibility:
- Divisible into small parts and able to be recombined into larger denominations.
Malleability:
- Money can be melted and shaped as desired to meet government specifications.
Uniformity:
- Money must conform to certain standards to avoid confusion (size, shape, and color).
Homogeneity:
- The material used must be uniform in composition throughout
Elasticity:
- A measure of the responsiveness of the demand for money to changes in interest rates.

Commodity Money
- Money that has its own value. The commodity value should equal its money value to circulate.
- Examples: Iron in China, Lead in Burma, Salt & Corn in North America.
Credit Money
- A credit instrument widely acceptable as payment for goods/services and settlement of debts/obligations.
- Types of Credit Money:
  - Representative Paper Money: Backed by 100% gold/silver reserves.
  - Fiduciary Paper Money: Backed by partial gold/silver reserves.
  - Bank Note: A bank's promise to pay the bearer a sum certain in standard money upon demand or date.
Fiat Money
- Paper money issued by government decree/publication or edict/law.
- Often issued during wartime, with the occupying country circulating paper money whose money value is unrelated to its intrinsic value.
Legal Tender
- Money that circulates because of its legal tender power.
- The debtor is authorized by law to offer it in payment of debt or obligation.

The process of making uniform coins from metals, stamped with a specific design to guarantee weight, fineness, and integrity.

The product of coinage.
A mass of metal cast in a convenient shape with a definite weight & fineness, guaranteed by the government and certified by the design impressed upon its surface.

A place or factory where coins are manufactured or minted, usually operated by the government.