Chronology of changes in the financial system

Chronology of changes in the financial system

Financial system has gone through a lot of changes over the period of time.

In the olden days, we had a barter system. In that system, people used to exchange things for the things. There was no medium of exchange like money we have today. For example, if a person has sugar and is looking for wheat and found a person who has wheat and also in need of sugar, they both can exchange those items and fulfill their needs. However, there were a lot of issues with that system. People find it difficult to find the person who possesses the goods they want and also exchanging regular things for the rare things was another major issue with that system.

Finding a medium of exchange has found solutions for such problems. Then the money has come into picture. Once medium of exchange is available, people are able to freely buy whatever they want and from wherever they want. To regulate such transactions to bring fairness into the financial dealings, banks have come into picture. Few years back, before the introduction of the internet, people were used to doing only offline transactions and they must visit their bank in person to get their things done.

But after the availability of the internet, people are able to get their banking transactions and also making purchases and sellings on their own from using their computers and smart mobile phones. Currency has changed its form for cash to plastic cards. Now debit and credit cards are available to make transactions not just for online shopping but also for offline shopping. You are not required  to keep cash with you anymore. You can just swipe your debit or credit card at the store to buy the goods and services you want. Further, today, cryptocurrencies such as Bitcoin is available where there are no banks involved in the transactions and it allows peer to peer transactions without central bank involvement.

We must see many more changes in the financial system going forward for sure.