Dr György Matolcsy
Governor, Magyar Nemzeti Bank
Foreword Undoubtedly, money is a revolutionary invention in the history of mankind that has shaped commercial and economic relations among people and influenced their everyday lives since its earliest appearance. Yet, this groundbreaking invention has changed and progressed a great deal over the centuries to meet the expectations created by evolving economic circumstances. The history of the successive forms of money can be seen as a series of innovations, and continuous innovation has been instrumental in ensuring that the different solutions increasingly fulfilled the functions of money (standard of value, means of circulation, means of payment, means of hoarding) while the supporting institutions and the infrastructure continued to advance. We have come a long way since the emergence of the first types of commodity money, and the process of development has accelerated further as globalisation and the technological, as well as the information and communication revolution has gathered pace. Accordingly, we can see that since the appearance of the first forms of money, the revolutionary changes now come in quick succession. However, the constant development can be divided into innovations in content and technology. Innovations in content occur when a change affecting the central features of money happens (e.g. monopolisation of minting, the appearance of fiat money without intrinsic value). Technological innovations include changes that do not modify money’s main characteristics from the perspective of its functions yet trigger some, perhaps even landmark, advances (e.g. the emergence of electronic records instead of paper-based account balances). I believe that the introduction of the instant payment system in Hungary was precisely such a landmark technological innovation, as money can now be transferred electronically
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