When it is not, or when complex and volatile forms of financial capital are involved, some may wish to identify a single standard of deferred payment to avoid strategic behavior.
2.
The main functions of money are distinguished as : a medium of exchange; a unit of account; a store of value; and, sometimes, a standard of deferred payment.
3.
Otherwise, for example, a debtor might try to select a standard of deferred payment of debt that is forecast to drop in value so the real value of his payment to the lender will be lower.
4.
Most modern textbooks now list only three functions, that of medium of exchange, unit of account, and store of value, not considering a standard of deferred payment as it is a distinguished function, but rather subsuming it in the others.
5.
The fact that a bank or value to others, its medium of exchange has some value, and its currency may also be useful as a standard of deferred payment among others, even those who never deal with that state directly in foreign exchange.
6.
Our money article is a bit negligent in not pointing out that the medium of exchange and standard of deferred payment functions are considered by " some " ( I realize that's a totally weasly statement ) to be distinct, bringing the total up to four.
7.
Although some commodity money ( barley ) has been used historically in relations of trade and barter ( Mesopotamia circa 3000 BC ), it can be inconvenient to use as a medium of exchange or a standard of deferred payment due to transport and storage concerns, and eventual rancidity.
8.
On the other hand, of course, is something is both " the " accepted store of value and " the " accepted medium of exchange, it's fairly hard to imagine it not being the standard of deferred payment-however, with several units of account competing to be store of value and medium of exchange, it's conceivable all three would be different.
9.
For example, in post-1873 ( or 1871, sources differ ) Germany, the German gold mark was used as a store of value, as a medium of exchange ( gold coins, and bank-notes exchangeable for gold ), as a basic unit of account, and as a standard of deferred payment ( for example, in contracts-I'm not sure whether mortgages where common back then ).
10.
Other functions rely not on recognition of some token or weight of metal in a marketplace, where time to detect any counterfeit is limited and benefits for successful passing-off are high, but on more stable long term social contracts : one cannot easily force a whole society to accept a different standard of deferred payment, require even small groups of people to uphold a floor price for a store of value, still less to re-price everything and rewrite all accounts to a unit of account ( the most stable function ).
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