For economists, money is defined by three key functions: a medium of exchange, a store of value and a unit of account. As a unit of account, money serves to measure the value of goods and services. Cash plays a key role in building a price reference: banknotes and coins help to visualise a price expressed in abstract numbers.
Banknotes and coins also contribute to the education of children. All over the world; children learn to count and solve arithmetic problems with banknotes and coins as their first steps in financial education. In many countries, central banks contribute to this effort; the Reserve Bank of India, for instance, has dedicated part of its website to a Financial Literacy Project109
. The objective is to explain the role of the central bank and general banking concepts to various target groups including children and college students, women, defence personnel, senior citizens and the poor in both urban and rural areas.
Numerous board games use facsimile banknotes which children spend to make their first transactions. Among them Monopoly
is celebrating its 80th anniversary in 2015 by randomly replacing the facsimile notes with real notes for some lucky customers110
. Pocket money is another form of financial literacy. By the age of three or four, most children understand that money can be used to buy things they want.
Banknotes are designed with art and symbols that represent their country. For many people, they constitute a cultural and historical experience. One of the most widely viewed portraits in the world is that of George Washington painted by Gilbert Stuart and reproduced on the US one dollar note111
. From January 1999 to November 2008, the United States Mint ran the “50 States Quarters Program” and annually issued five commemorative quarters with designs emblematic of a state on the reverse. These coins educated millions about the history, culture and geography of each state. They encouraged a generation of Americans to examine the coins in their pocket and revived the hobby of coin collecting. The program also generated great public interest as millions of citizens participated in their state’s design-selection process or attended the launch of their state’s new quarter.
Because coins are made in metals, they last for ages and provide clues about the place and period in which they were minted. Most written records from the ancient world have been lost or destroyed, but because coins are produced in large numbers, some survive where other evidence may not. Indeed, sometimes they are the only evidence that remains and provide important information for historians and archaeologists.