Types of Money Systems

The monetary system is a special form in which money is circulated in a certain country, established over time and approved by law. In Europe, monetary systems developed by the 16th-17th centuries.

Various major types of monetary systems evolved and developed in different countries at different time periods. The monetary system itself passes historically two main stages : the first - when gold was used as the universal equivalent, fulfilling the functions of money; The second is when the role of gold falls and credit money is introduced into circulation.

Elements of the monetary system are: the name of the unit of money (in the Russian Federation - the ruble), types of bank notes, the scale of prices, the procedure for circulation and issue of money, the order of money turnover, the state apparatus for regulating money circulation.

A separate part of the money system is a currency national system, which in principle acts as a relatively independent phenomenon.

There are different types of monetary systems that are peculiar to countries historically. It is development in time that leads to a change in the systems of circulation. In this case, the concept and types of monetary systems depend on the form of the functioning of money. There are two forms of such forms: commodity and monetary proper (signs of value). The differences of these forms are that under the systems of metal circulation , money functions in the form of coins, and under credit and paper money systems , money is circulated in the form of banknotes, bills, checks, treasury notes.

With metallic circulation, these types of monetary systems are distinguished: monometallism and bimetallism.

Bimetallism is a system in which two precious metals (usually silver and gold) are assigned the role of the equivalent of all goods and values. Coins of two metals are issued on an equal basis.

The varieties of bimetallism are the system of parallel currency (the spontaneous ratio of currency in gold and silver), the double currency (this ratio is determined by the state) and the "lame" currency (coins of the two metals are means of payment, but not on the same basis). Bimetallism has long existed in European countries and in Russia. But the functioning of two metals at once contradicted the nature of money and led to price fluctuations. As a result, the double measure of value was eliminated. There were prerequisites for the transition to monometallism.

Monometallism is such a system of circulation, when only one metal can serve as a universal equivalent. In it coins are drawn (either gold or silver) and other signs of value, which are exchangeable for metal. Gold monometallism was first established in England in the late 18th century. Silver monometallism in Russia came in 1843.

Modern types of monetary systems are characterized by a loss of the connection of money with metal; Domination of credit money, not exchangeable for precious metals, which are essentially close to paper; Development of non-cash turnover and reduction of cash circulation; Inflation; Control of the state for the state of monetary circulation.

Banknotes today are of a credit nature: they are issued for the growth of gold and foreign exchange reserves, are intended for lending to branches of the economy, are subject to the laws of paper money circulation.

The state of the monetary system depends on the processes of reproduction, on which it influences, speeding up or restraining it. Paper and credit money in modern society are monopolized by the state. The central bank seeks sometimes to compensate for the shortage of money by increasing the mass of money through an additional issue of signs of value.

The monetary system of the Russian Federation recognizes the ruble as the basic monetary unit. Payment power in the Russian Federation has such types of money as banknotes (banknotes) and coins made of metal. Payments can be made in cash and non-cash form.