The early kings of Lydia standardized the hunks of metal and guaranteed their quality by stamping the king's picture on them. These were the first coins. This guarantee of quality by the Lydian kingdom -- already a rich and powerful one -- was very successful, and made the Kingdom of Lydia even richer, indeed proverbially rich. Croesus and Midas -- of all kings the most proverbially wealthy ones -- were among the kings of Lydia. But what Lydia could do, other kingdoms could also do. By 1000 AD, metallic coin monetary systems had spread through much of the Old World. Paper money were first used in China
As in so many other things, the Chinese were the innovators for the next step. The Chinese invented printing, and not too much later, they also invented paper money. It was widespread in China by around 1000 AD, but the Chinese abandoned it after about 1500, in the general decline of Chinese society after the Mongol conquest. Paper money was to evolve much more indirectly in Europe, though. A bimetallic standard is a monetary standard where the monetary unit is defined as consisting of either a certain amount of a metal or a certain amount of another, with the monetary authority being ready at all times to coin either metal at the legal price. For example, in the United States for the greater part of the 19th century the dollar was defined as consisting either of 22.5 grains of gold or 371 grains of silver (a grain is 0.065 grams). People could bring gold or silver bars at the Mint (the agency responsible for coining money) and they would get gold or silver dollar coins in exchange (www.micheloud.com).
Story of early Canadian money
Metallic coins were hard to find in Canada. People hoarded the coins and paid in hides. Part of what we call today "Canada" was French until 1763. The king of France used to send a Governor that administered the colony with some civil servants and soldiers. Trade within the community was limited because of the scarcity of means of exchange, namely, coins. Earlier trappers used hides as money, but the people that came from France regretted the so practical metallic money used in their country. The problem was that, as in other colonies, metallic coins had a tendency to leave the colony very soon or disappear. People, in accordance with Gresham's Law, hoarded these rare coins, not willing to give them away to pay for goods unless forced to do so ; furthermore, if they wanted to buy manufactured products from France, they had to pay in coins. Thus often coins sent at great expenses left Canada by the same boat on which they came.