Not well-versed in economics myself, but I just randomly thought of this today.
I learned a long time ago that before money and currency and stuff like that, people used to barter for things they wanted.
For example, Person 1 is selling fish. Person 2 wants the fish, and will give Person 1 something of somewhat equal value in exchange for the fish.
That's how it worked, iirc.
And then time passed. Until China (I think) invented paper money.
But what if they didn't? How different would our economy be today? What if everyone continued on with bartering?
There's a theory (proposed by Gruber) suggesting that ancient economies actually used different forms than currencies and paper money. I don't remember exactly stuffs, so sorry if I spout mistakes.
Trade could be done through:
-commodities (like gold and indirectly paper money based on gold, food/grains, seashells). They are sort of vulnerable to sudden inflation though and variability of availability.
-debt system, like modern paper money (which value is no longer tied to gold but to the countries). It is suggested that debt was very common and actually the main system of economy in close knit communities (like small towns). There are also sticks used as tools to keep track of debt between merchants.
-public ledger, the entire community keeps track of who owes who. (In simple old econ, it could be a giant stone wheel that the village moves between people. Cryptocurrencies are a modern form of public ledgers)
-currencies/tokens like material coins specifically minted by the State. It is suggested that coins were created to integrate armies in local economies by demanding taxes paid in currencies, thus forcing villagers to trade with mercenaries and soldiers who could not integrate in trust-based economies like old public ledger or debt systems.
Considering this, token economies independent from personal trust are bound to emerge in worlds where war exists and massive kingdoms start to rise and needs to employ armies and mercenaries (because it'll wipe out all those who don't use it).
On another note, modern paper money is still a debt based system. The revolution is that the State enforces a global trust in the impersonal market, freeing the citizens from forming relationships of trust personally.
In conclusion, if there's a world where there isn't paper money invented yet, it must be a peaceful world where States and business don't crush their competitors with overwhelming money diff gained through debts. That means small scale family-like communities.
Debts and integrating armies into local economies are too OP to pass up if you rule your country.