A monetary system is a special form in which money is circulated in a certain country, which has developed over time and is approved by law. In Europe, monetary systems developed by the 16-17th centuries.
Various main types of monetary systems evolved and developed in different countries at different time periods. The monetary system itself has historically gone through two main stages : the first - when gold, which served as money, was used as the universal equivalent ; the second is when the role of gold falls and credit money is introduced into circulation.
The following are considered elements of the monetary system : the name of a unit of money (in the Russian Federation - ruble), types of banknotes, price scale, order of circulation and issue of money, order of money circulation, state apparatus for regulating money circulation.
A separate part of the money system is the national currency system, which, in principle, acts as a relatively independent phenomenon.
There are different types of monetary systems that have been characteristic of countries historically. It is development over time that leads to a change in circulation systems. Moreover, the concept and types of monetary systems depend on the form of functioning of money. There are two such forms: commodity and money itself (cost signs). The differences in these forms come down to the fact that under metal circulation systems , money functions in the form of coins, while under credit and paper money systems , money circulates in the form of banknotes, bills, checks, treasury bills.
In metallic circulation, these types of monetary systems are distinguished - these are monometallism and bimetallism.
Bimetallism is a system in which the role of the equivalent of all goods and values is assigned to two precious metals (usually silver and gold). Coins from two metals are issued on an equal footing.
Varieties of bimetallism are a system of parallel currency (a spontaneous ratio of the currency in gold and silver), double currency (this ratio is determined by the state) and “lame” currency (coins of two metals are means of payment, but not on the same basis). Bimetallism has long existed in Europe and in Russia. But the functioning of two metals at once contradicted the nature of money and led to price fluctuations. As a result, a double measure of value was eliminated. Prerequisites for the transition to monometallism appeared.
Monometallism is such a circulation system when only one metal can serve as a universal equivalent. It circulates coins (either gold or silver) and other signs of value, which are exchangeable for metal. Golden monometallism was established for the first time in England at the end of the 18th century. Silver monometallism came to Russia in 1843.
Modern types of monetary systems are characterized by the loss of the connection of money with metal; the dominance of credit money, not exchangeable for precious metals, which are essentially close to paper; development of cashless circulation and reduction of cash circulation; inflation state control over the state of monetary circulation.
Banknotes today have a credit nature: they are issued against the growth of foreign exchange reserves, are intended for lending to industries, are subject to the laws of paper circulation.
The state of the monetary system depends on the processes of reproduction, on which it affects, accelerating or inhibiting it. Paper and credit money in modern society is monopolized by the state. The Central Bank sometimes seeks to compensate for the shortage of money by increasing the mass of money due to the additional issue of value signs.
The monetary system of the Russian Federation recognizes the ruble as the main monetary unit. Such types of money as bank notes (banknotes) and coins made of metal have payment power in the Russian Federation. Payments can be made in cash and non-cash.