The difficulties faced in the barter system of trade were an obstacle to trade and development. A need was felt for a third commodity to be used as a medium of exchange. Therefore people experimented with different commodities. This led to the evolution of money. This evolution is a slow and gradual change in the institution of money. It has taken various forms from time to time with the progress in civilization. Even the present form of money we use may take another shape in future. The stages in evolution of money are as follows.
I) Animal money.
II) Commodity money.
III) Metallic money.
IV) Metallic coins
V) Paper money
VI) Credit money.