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There are a lot of pros and cons when it comes to coins, and a lot of pros and cons when it comes to paper money (or bills, as they are sometimes called). But which is better?
Durability
Hands down this goes to coins.
Cost effectiveness
Paper money wins this one
Portability
Again this goes to paper money as well.
Counterfeiting
When it comes to counterfeiting, coins win this.
Disabled friendlyUnless paper money is made at different sizes, the blind can't tell a $1 bill from a $ bill.
Paper money and the actual world monetary system are the most EVIL form in my opinion.
Thanks for the invite ............................ agreed with the answers Mr. Barkat Ali
Paper currency or bank notes appeared: because of problems related to the cost of storing and transporting money commodity (which was the most important metal gold and silver), which were used for the commodity exchange. Thus it was invented paper currency to serve as a promise from the issuer by turning it into a commodity money whenever the bearer wanted to. It then evolved banknotes evolution became Monetary value is not derived from the ability to turn it into a commodity money, but became derive their value from that exporting its governments, and thus became known as (legal money).
I fully endorse answers given by Mr. Moin Akber and Mr. Barkat Ali. Thanks
Yes its true because in many countries people buy and sale there products by using paper money. There are many problems connected with Paper money now a days.
But most advance countries use online transaction through banks and the businessmen prefer to use credit and debit cards because he cant travel with boundles of notes. In my point of view in future the most advance form of money can be Bank Notes, Traveller Cheques, Cash Cards, Global Cash card, Credit and Debit Cards. It depends on the transaction amount.
Hi Aliza, thank you for a great question.
Indeed I trust gold bars and golden rather than paper money when come to own preferences of currencies that's because gold money keeps its value away from competition versus $US dollar which controls the world economies and resulted in many financial crisis worldwide.
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Regards
PAPER MONEY :-Mr. Hanson has defined the paper money in the following words, " Paper money means the paper instruments such as bank notes, cheques, bill and other forms which take the place of money and circulate as a medium of exchange.On the following grounds paper money is preferred on metallic money.ADVANTAGES OF PAPER MONEY :-Following are the main advantages of paper money :1. Portability :-Notes are easily portable. It is very easy for making the payments in different placers and it is preferred than the metallic money.2. High Value In Small Bulk :-No any sort of money can be compared with our modern notes because its weight is minimum and value is high.3. Economical In Cost :-The printing of paper money is very quick, cheap, and economical as compared the metallic money.4. Saving Of Precious Metals :-The use of paper money has saved a lot of precious metals like gold and silver. The wear and tear of these metals also saved. The precious metals can be used for the productive purposes.5. Easy In Counting :-Paper currency can be counted more easily than coins. The counting of metallic money is a very difficult job.6. Easily Recognizable :-The paper money is easily recognizable. There is no botheration of testing the genuineness of the money material.7. Uniform Quality :-The paper money has another advantage that has a uniform quality and the holder least bothers for possession of new or old money.8. Useful In Emergency :-The government can increase its resources by printing of more notes and can meet its requirements.9. Elastic Supply :-The volume of paper money can be very easily expanded in accordance with the needs of the country. While the metallic money supply is in elastic.10. Useful For Development :-Paper or credit money is very useful for trade and industrial sector. If any person wants to establish factory or wants to import any commodity it facilities him.11. Stability :-The value of metalic money changes with the passage of time. But the paper money value remains stable because its weight can not reduce by using it.12. Easy Payment :-Through paper money you can make the payments in million rupees, easity. While it is very difficult to make such payments in metalic money.DISADVANTAGES OF PAPER MONEY :-1. Restricted Acceptability :-The acceptance of paper money is limited upto the domestic country while other countries of the world are not ready to accept in case of payments.2. Fluctuations In The Rate Of Exchange :-In case of metallic money the value of domestic currency in terms of foreign currencies, rate of exchange remains stable while in case of paper money it remains fluctuating. The devaluation of one country also brings changes in the rate of exchange.3. Demonetization Of Paper Money :-If the Govt. demonetizes the paper money the paper holder will have a worthless pieces of paper in his hand.4. Lack Of Durability :-The paper money lacks the essential quality of durability of money. It can be easily destroyed, and then it will have no value.5. Danger Of Inflation :-The serious defect in paper money is that there is always danger of its over issue. Generally the less developing countries make the difficult budget and this deficit is met by the issuance of paper money. The price level rises and country faces the inflation.6. Less Stability :-There is less stability of value in paper money as compared to metallic money. Some times it is over issued and people loose confidence in the value of money and they keep their savings in terms of gold and silver.No doubt paper currency has also some disadvantages but it is a fact that its advantages are more weighty.
Paper money is the most advanced type of money. It fulfils almost all the qualities of good money, because it is economical, easily recognizable, portable and storable. It can be classified into
Now a days majority of paper currency is fiat money. Different authors have defined paper profit the following words.
In words of F.Perry:
Paper money is documents representing money, such as bank note, promissory notes, bills of exchange or postal orders.
In words of M.Greener:
Paper money means documents with a price stated on them but having no value in them.
Cheap and economical:
Normally paper money is significantly simpler to issue. Practically it cost nothing to government. Printing of paper currency is requires certain special types of paper, ink, and printing technology. These exact things no doubt are costly but overall printing cost is fairly low.
Convenience:
Paper money is convenient to transfer and carry. It may be easily kept in pocket. Further it can be readily changed into cheques, drafts, etc.
Copying:
The style of paper money is very hard to copy. Further special kind of paper and ink is utilized in paper money that means it is quite impossible to copy. Even when it copied by some fake means then it could be checked by electronic machines.
Homogeneous (Uniform quality):
The paper money has another advantage so it has uniform quality and the holder doesn’t bother for possession of new or old money.
Elastic supply:
Paper money because elasticity is very helpful for government. Way to obtain money could be increased or decreased in accordance with the needs of the economy. Like at a peak degree of business activity the demand of money increases and the monetary authorities can quickly issue paper money to fulfill the demand of money.
Benefit of unlimited legal tender:
Paper money is unlimited tender i.e a variety of payment or of debt could be paid in it. It works extremely well to discharge a myriad of business obligations.
Precious metals saving:
Utilization of paper money results the saving of precious metals of the country. The metals works extremely well for other useful purposes.
Simple counting:
Paper money will be a lot simpler to count than metallic money. The counting of considerable amounts in metal form is inconvenient and difficult. On the other hand counting of paper money is straightforward, convenient and requires little time.
Recognizable:
The paper money is easily recognizable. There’s no inconvenience of testing the exactness of the amount of money material.
Useful in emergency:
The paper money works extremely well in emergency life war and floods. The united states government can meet up with the expenses by printing notes in shorter time. But metallic money takes long period of time for mining, refining and minting the metals.
Stable in value:
The metallic money depreciates because of wear and tear. The paper money really helps to regulate such loss. The depreciation means decline in the worth of coins because of usage.
Easily portable:
Paper money is portable i.e. it may quickly be transferred in one place to some other in comparison to metallic money. The price tag on transferring paper money is very low and it might be transferred really limited time period.
Paper money as a currency has long been obsolete. Now almost everyone pays for various purchases with credit cards or online. There is no point in using cash. This is especially noticeable for those who are engaged in trading. I for example after reading https://www.ironfx.com/en/trading/spreads it has become easier to treat money.
