Early Currency Exchange History

In the early history of currency exchange, the values of goods were expressed in terms of other goods which mean that there was an economy based on barter method. Such a system had many drawbacks and made trading inefficient and time consuming. Because it involved inspection of each item to determine its worth before haggling begins. Moreover the goods which were exchanged for one another while trading were not of same value and worth. A bag of pulses may not be matching the value of a lamb, so the trader would have to add a bottle of honey to balance the things. These flaws made things much more complex and these were also the reasons which led to the formation of generally accepted means of exchange during the very early history of currency trading.

A solution was gradually developed by many cultures to overcome the problems of the barter system, and the solution was the birth of common currency accepted by all. At a very early history of currency trading, everything from animal teeth to feathers to gem stones served the purpose of currency but soon after the coins of different metals particularly of silver and gold established themselves as universally accepted modes of payment as well as a reliable storage of value.

Well going back to early currency exchange history, let us have a brief look at the details provided below to know more about early foreign exchange history. The one of most famous channels of foreign exchange in the early currency exchange history was along the Silk Road. This road started from the Chinese city of Xian and went through various trails before reaching the west.

A large variety of goods were traded back and forth between Asia, the Middle East, and Europe through this historical route of early foreign exchange history. Many centuries back, traders used to travel on camels loaded with all sort of trading goods like silks, rugs and aromatic spices for which there was a high demand in Europeans countries. These goods used to be traded in the open markets in the city streets. The trading steps were very simple. The market goods were inspected and then value was suggested and deal used to get done. Money and objects used to get exchanged for one another. So, we see that in the early currency exchange history, the kind of trade was the barter system which had many flaws that led to the development of currency.