ABSTRACT
This chapter analyzes the concept of money and its role in a financial system. Starting from a definition of money, the main functions of money are analyzed to stress the conceptual framework of any monetary tool. The essential use of money is to settle payments, working as a medium of exchange. However, money was used as a store of value. In the meantime money help to compare the values of different assets (and liabilities) working as a unit of account. An analysis of how the concept of money evolved by the time, starting from ancient times, until the current functioning of the so-called “fiat money” helps to understand how the physical supports of money changed many times, but the concept of money and the parameters to assess the quality of a currency remain substantially the same across time.
