Short Note on Money and Its Evolution

Definition of Money

Money is any commodity or economic unit that is widely accepted as a medium of exchange for goods
and services. It serves as a standard for measuring value and facilitates trade. To be accepted as money,
a commodity must meet the following criteria:

Standardization – Its value should be easily determined.

Acceptability – It must be widely recognized as a medium of exchange.

Divisibility – It should be easily broken into smaller units.

Portability – It must be easy to carry.

Durability – It should not degrade quickly.

Evolution of Money

1. Barter System – The earliest form of exchange where goods were traded directly. However, it had
major limitations, such as the lack of a common value and difficulty in storing wealth.

2. Commodity Money – Items like salt, beads, and metals were used as money based on their intrinsic
value. In Ethiopia, salt bars (amole) were widely used.

3. Metallic Money – Coins made of precious metals (gold, silver) replaced commodity money. The
Axumite kingdom used coins as early as the 3rd century A.D.

4. Paper Money – Introduced as a more convenient medium of exchange. In Ethiopia, the first paper
money was issued by the Bank of Abyssinia in 1914 but was not widely accepted initially.

5. Banking and Checks – To reduce the risks and inefficiencies of carrying cash, banks introduced checks,
which allow payments without physical currency.

6. Electronic Money (E-Money) – The most modern form of money, including credit cards, digital wallets,
and online transactions, which have improved convenience and security in payments.

Money in Ethiopia

The Maria Theresa Thaler was widely used in Ethiopia from the late 18th century until 1945.

Emperor Menelik II minted Ethiopia’s first national coin in 1893.

Money has evolved from barter to digital payments, increasing efficiency, security, and economic
growth worldwide.

Qoraal Kooban oo Ku Saabsan Lacagta iyo Taariikhdeeda

Macnaha Lacagta

Lacagtu waa badeeco ama cutub dhaqaale oo si ballaaran loogu aqbalo wax kala iibsiga, bixinta
adeegyada, iyo bixinta deymaha. Waxay u adeegtaa cabbir qiimeed oo sahla ganacsiga. Si badeeco loogu
aqbalo lacag ahaan, waa inay lahaataa shuruudaha soo socda:

Halbeeg Caadi ah – Qiimaheeda waa in si fudud loo garan karo.

Aqbalaad – Waa in si ballaaran looga aqbalo ganacsiga.

Kala qaybsanaan – Waa in lagu kala jebin karo qaybo yaryar.

La qaadi karo – Waa in si fudud loo qaadi karo.

Dabacsanaan – Waa inaysan si sahlan u xumaan ama u burburin.

Soo-Evolushinka Lacagta

1. Nidaamka Isweydaarsiga Alaabta (Barter System) – Dadku waxay badeecado si toos ah isugu beddelan
jireen. Laakiin, nidaamkan wuxuu lahaa dhibaatooyin badan sida helista qof doonaya badeecadaada isla
markaana haysta tan aad u baahan tahay.

2. Lacag Badeecad Ah (Commodity Money) – Dadku waxay lacag ahaan u isticmaali jireen waxyaabo
qiimo leh sida cusbada (amole), dhogorta, iyo xoolaha. Soomaaliya iyo Itoobiya, cusbada ayaa ahayd
lacag caan ah.

3. Lacag Bir ah (Metallic Money) – Biraha qaaliga ah sida dahabka iyo qalinka ayaa loo isticmaali jiray
lacag ahaan. Boqortooyadii Axum waxay isticmaali jirtay lacag bir ah qarniyadii 3aad.

4. Lacag Warqad Ah (Paper Money) – Waxaa loo abuuray in lagu beddelo lacagta birta ah oo ay
fududahay in la qaado. Itoobiya, bangigii ugu horreeyay ee soo saara lacag waraaq ah wuxuu ahaa Bank
of Abyssinia sanadkii 1914, laakiin bulshada si sahal uma aqbalin.

5. Baanka iyo Jeegagga (Checks) – Bangiyada waxay soo saareen jeegag si loo yareeyo halista iyo
dhibaatada keenista lacag tiro badan.

6. Lacag Elektaroonik Ah (E-Money) – Lacagta casriga ah sida kaararka deynta (credit cards), e-wallets,
iyo bixinta online-ka ayaa hadda si weyn u fududeeyey habka lacag bixinta.
Lacagta Itoobiya

Maria Theresa Thaler waxay ahayd lacag caan ka ah Itoobiya laga soo bilaabo qarnigii 18aad ilaa 1945.

Menelik II wuxuu soo saaray lacagtii qaran ee ugu horreysay 1893.

Birta Itoobiya waxay noqotay lacagta rasmiga ah ee dalka laga isticmaalo 1945, iyadoo lagu beddelay
lacagihii shisheeye.

Lacagtu waxay ka soo bilowday nidaamka is-weydaarsiga badeecadaha ilaa lacagta elektaroonigga ah,
taasoo sare u qaadday fududeynta ganacsiga, amniga, iyo horumarka dhaqaale.

6.3 Functions of Money

1. Medium of Exchange – Money facilitates trade by eliminating the need for barter, reducing
transaction costs, and enabling specialization.

2. Money as Unit of Account – Money provides a standard measure of value, making price
comparisons easier and economic calculations efficient.

3. Store of Value – Money preserves purchasing power over time, allowing individuals to save and spend
later.

4. Standard of Deferred Payments – Money enables borrowing, lending, and investment by allowing
payments to be made in the future.

Shaqooyinka Lacagta (Fiiro Kooban)

1. Dhexdhexaad Ganacsi – Lacagtu waxay fududeysaa ganacsiga iyada oo baabi'inaysa nidaamka sarrifka
(barter) oo yaraynaysa khasaaraha wakhtiga.

2. Cabbir Qiime – Lacagtu waa halbeeg lagu cabbiro qiimaha badeecooyinka iyo adeegyada, taasoo
fududeysa isbarbardhigga qiimaha.

3. Keyd Qiime – Lacagtu waxay haysaa awoodda wax iibsiga muddo dheer, taasoo u sahlaysa dadka inay
kaydsadaan oo ay dib u isticmaalaan.

4. Halbeeg Deyn Bixineed – Lacagtu waxay sahlaysaa in la amaahdo, la maalgeliyo, ama la bixiyo lacag
mustaqbalka.

Demand and Supply of Money (Short & Interesting Notes)

John Maynard Keynes explained that people hold money for three key reasons:

1. Transaction Motive – To meet daily expenses (income motive) and business needs (business motive).

2. Precautionary Motive – To handle unexpected expenses like illness or emergencies.

3. Speculative Motive – To take advantage of future investment opportunities.

Supply of Money

Money supply is the total amount of money available in an economy.

It includes coins, currency notes, and bank deposits.

In modern economies, bank deposits dominate over cash.

Controlled by the central bank through credit policies.

Interesting Fact: In old times, coins were the main form of money, but today, digital money and bank
transactions are taking over!

Baahida iyo Bixinta Lacagta (Fiiro Kooban oo Xiiso Leh)

Baahida Lacagta

John Maynard Keynes wuxuu sharaxay in dadku lacag u haystaan saddex sababood oo waaweyn:

1. Daneeye Macaamil – Lacag loo haysto kharashaadka maalinlaha ah (mushaharka) iyo ganacsiga.

2. Daneeye Kayd – Lacag loo haysto si wax looga qabto xaalado lama filaan ah sida cudur ama shil.

3. Daneeye Maalgashi – Lacag loo haysto si looga faa'iidaysto fursado maalgashi mustaqbalka.

Bixinta Lacagta

Bixinta lacagta waa wadarta guud ee lacagta ku jirta dhaqaalaha.

Waxay ka koobantahay qadaadiic, waraaqaha lacagta, iyo kaydka bangiyada.

Maanta, xisaabaadka bangiyada ayaa ka badan lacagta gacanta lagu haysto.

Waxaa xakameeya bangiga dhexe iyada oo loo marayo siyaasad maaliyadeed.

Xaqiiqo Xiiso Leh: Waqtigi hore, lacagtu waxay u badnayd qadaadiic, balse maanta, lacagta dhijitaalka ah
iyo xisaabaadka bangiga ayaa si weyn u beddelay nidaamka lacag-bixinta!
Money and Electronic Money (e-Money) – Short & Interesting Note

What is Electronic Money?

Electronic money (e-money) is a digital store of monetary value used for payments via debit cards, credit
cards, prepaid cards, and online transfers. It makes transactions faster and more convenient.

How Does It Work?

Uses Electronic Fund Transfer (EFT) instead of paper-based transactions.

Accessed via ATMs, debit/credit cards, and mobile banking apps.

Requires PINs, signatures, or biometric scans for security.

Lacagta Caadiga ah iyo Lacagta Elektarooniga ah (e-Money) – Fiiro Kooban oo Xiiso Leh

Waa Maxay Lacagta Elektarooniga ah?

Lacagta elektarooniga ah (e-money) waa lacag dijitaal ah oo lagu kaydiyo qalab farsamo sida kaarar
bangi, lacag horay loo sii shubtay (prepaid cards), iyo xawaaladaha internetka. Waxay fududeysaa bixinta
lacagaha si dhakhso ah oo sahlan.

Sidee Ayay U Shaqeysaa?

Waxay isticmaashaa Electronic Fund Transfer (EFT) halkii laga isticmaali lahaa waraaqo iyo jeegag.

Waxaa lagu heli karaa ATM-yada, kaararka deynta iyo deebaajiga (debit/credit), iyo adeegyada bangiga
casriga ah.

Waxay u baahan tahay PIN, saxiix, ama aqoonsi biometrik ah si loo sugo ammaanka.

Advantages of e-money:
✔ the ability to move money quickly

✔ better recordkeeping

✔ global money transfers

✔ the ability to move large sums of money without any physical burden

Disadvantages of e-money

✔ cybercrime and new digital forms of money laundering (crime)

✔ users must have a minimum level of training and knowledge, especially with

more complicated forms of electronic transfers

✔ some types of e-money, most notably crypto currencies, are closely linked to

criminal activity

✔ both hardware and software are required to perform transfers of electronic

cash

Faa'iidooyinka iyo Qasaaraha Lacagta Elektarooniga ah (e-Money)

✔ Faa'iidooyinka e-Money:

Dhaqso u wareejinta lacagaha – Lacagta si degdeg ah ayaa loo diri karaa loona heli karaa.

Xisaab celin wanaagsan – Dhammaan macaamilada waa la duubayaa, taasoo fududeysa la socodka
dhaqaalaha.

Xawaaladaha caalamiga ah – Lacag si fudud ayaa looga diri karaa loona heli karaa dunida oo dhan.

Soo wareejinta lacag fara badan oo aan la qaadin – Lacag badan ayaa la kala diri karaa iyadoo aan jirin
culays jireed.

✘ Qasaaraha e-Money:

Dambiyada internetka & dhaqidda lacagaha sharci-darrada ah – Waxay fududeyn kartaa falal
burcadnimo iyo lacag dhaqid.

Baahida aqoon & tababar – Dadka isticmaala waa inay leeyihiin aqoon aasaasi ah, gaar ahaan
nidaamyada adag.
Lacagaha dhijitaalka ah sida cryptocurrency – Qaarkood waxaa si dhow loola xiriiriyaa falal dambiyeed.

Qalab iyo software loo baahan yahay – Si loo fuliyo macaamilada, waxaa loo baahan yahay qalab
(computer/telefoon) iyo software.