Function of Money

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Bernard Lietaer:

"The three most important functions of money according to classical economics are standard of value, medium of exchange and store of value. In most of history these three functions were not played by the same currencies. For instance, many cultures have had standards of value different from the medium of exchange. One important unit of value in ancient Europe used to be cattle — Homer (8th century BC) would invariably express values in oxen. However, payments were often made in a more practical media such as standardized bronze ingots, gold or silver bars and later coins.

All currencies can therefore be classified in terms of the number and kinds of functions they are designed to fulfill:

  1. Standard of Value,
  2. Medium of Exchange, and
  3. Store of Value."



Community Currency Guide. by Bernard Lietaer and Gwendolyn Hallsmith. 2006 [1]