Are you referring to fiat currency? Currency was originally only precious metals, such as gold and silver. Paper money (and even sea shells or other items) have taken the place of metals, just because they are easier to transport and widely accepted as having value.

This is a very, very complicated question. Like so many issues here on AskHistorians, you first need to define what you mean by "currency".

Do you mean its current incarnation as pieces of paper with pictures of dead presidents on them? Or do you mean any instance where something of no inherent value was deemed by those in power to have a much higher value in trade and payment of taxes?

Of course, those questions are rhetorical. Here is an essay by a monetary professional that gives a fantastic introduction to monetary history:

https://www.galmarley.com/framesets/fs_monetary_history_faqs.htm