Introduction Money is defined as anything that is accepted as a means of payment for goods or services. It is a legal tender issued by the government of a particular country through its central / national bank for transaction purposes. A bank can be defined as a financial institution that receive deposits from people and lend these funds to firms and individuals. Banking simply means a process through which the bank engage in the business of safeguarding money and issuing of credit. Banks act in accordance with central bank, which regulates the operation of local banks in any country. The central bank does this to prevent inflation which may occur due to increase in money supply in the economy. This paper discusses the evolution of money. It also looks into the functions and characteristics of money. Barter Trade In ancient times, traders used to exchange goods for goods. There was a central market and people could converge there with their items. For example, a person would bring a goat in the market to exchange with an item he/she wanted. The problem was lack of double coincidence of want [1] . Another problem that was encountered in barter trade was the issue of divisibility of some items. For example, if a person had a cow and needed only two buckets of beans it became hard to transact since it was hard to harmonize the value of the two. So it lacked common measure of value and some commodities were hard to divide into smaller units. These types of problems made barter trade to be a hard task to acquaint. The system of exchange was crude and clumsy. People then decided to introduce other items to try and solve this problem [2] . Initially, they introduced commodity money (i.e. skins, beads, hide, fur and shells among others). People started using these items to purchase whatever they wanted. Different tribes came with unique items from their areas and initially these commodities were accepted as a means of exchange. A man who had a surplus of food would gladly exchange it for beads even though he had no particular desires for them. Certain commodities came to be recognized as best fitted to serve the purpose of a go-between in making exchanges. Then metallic money evolved where people identified durable items such as copper and gold for exchange. Gold was valued at a considerable higher value compared to other metals. Traders started using gold for exchange of goods and eventually it was accepted by almost everybody. Traders would go to goldsmith and get commodities they wanted with respect to the quantity of their gold. The goldsmiths were valuing the metal then exchanging it with the respective quantity of item the trader needed. Afterwards, the goldsmiths started issuing traders with receipts that were used as medium of exchange. It acted as a goldsmith bank because they kept these items for traders and provided individuals with receipts, which were accepted even by other people. This gave rise to development of banks that started printing notes and providing coins. Functions of Money It acts as medium of exchange where it is accepted by both buyers and sellers; the buyer gives money to the seller in exchange of commodities. It acts as a store of value where money held by individ