In order to take place, economic transactions need an efficient means of exchange which also acts as an acceptable unit of account. Money, whether in the form of coins, notes or electronic bank accounts, serves that purpose.
In most economies the majority of transactions are done within national borders. The monetary system that is required for this to happen is achieved by the creation of a central bank, regulated by the nation state, which controls the issue of money and regulates the activities of other money-creating institutions like commercial banks. The emergence of unified nation states set up the political conditions necessary for the successful introduction of national currencies.
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