Im going to answer very simplistically I guess because you are not specifying a time period, but before the 20th century the vast majority of places in the vast majority of times have used currencies that were literally precious metals or tied to the value of precious metals.

It's not so much a matter of trading the coins in (also yes, large transactions would not be in coins but in bars) but in considering that, say, an English Pound worth one troy pound of silver has the same actual value as a French Franc worth one troy pound of silver. The value of the coins was literally in their weight in precious metal. Of course, it is far more complex than that, but that's the most succinct way to put it for the period of "throughout history."

It's hard to get at first, but you should think of currency as a commodity (which it is, and always has been). It's just a useful commodity of exchange. We all accept it as a useful medium for the exchange of goods. In places where there is no money, some other commodity takes over: in the 20th century this was often cigarettes.