Currency

Currency

Overview
In economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...

, currency refers to a generally accepted medium of exchange
Medium of exchange
A medium of exchange is an intermediary used in trade to avoid the inconveniences of a pure barter system.By contrast, as William Stanley Jevons argued, in a barter system there must be a coincidence of wants before two people can trade – one must want exactly what the other has to offer, when and...

. These are usually the coins
COinS
ContextObjects in Spans, commonly abbreviated COinS, is a method to embed bibliographic metadata in the HTML code of web pages. This allows bibliographic software to publish machine-readable bibliographic items and client reference management software to retrieve bibliographic metadata. The...

 and banknotes of a particular government, which comprise the physical aspects of a nation's money supply
Money supply
In economics, the money supply or money stock, is the total amount of money available in an economy at a specific time. There are several ways to define "money," but standard measures usually include currency in circulation and demand deposits .Money supply data are recorded and published, usually...

. The other part of a nation's money supply consists of bank deposits (sometimes called deposit money), ownership of which can be transferred by means of cheque
Cheque
A cheque is a document/instrument See the negotiable cow—itself a fictional story—for discussions of cheques written on unusual surfaces. that orders a payment of money from a bank account...

s, debit card
Debit card
A debit card is a plastic card that provides the cardholder electronic access to his or her bank account/s at a financial institution...

s, or other forms of money transfer. Deposit money and currency are money
Money
Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past,...

 in the sense that both are acceptable as a means of payment.

Money in the form of currency has predominated in human civilizations from about 10,000 BCE on.
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Encyclopedia
In economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...

, currency refers to a generally accepted medium of exchange
Medium of exchange
A medium of exchange is an intermediary used in trade to avoid the inconveniences of a pure barter system.By contrast, as William Stanley Jevons argued, in a barter system there must be a coincidence of wants before two people can trade – one must want exactly what the other has to offer, when and...

. These are usually the coins
COinS
ContextObjects in Spans, commonly abbreviated COinS, is a method to embed bibliographic metadata in the HTML code of web pages. This allows bibliographic software to publish machine-readable bibliographic items and client reference management software to retrieve bibliographic metadata. The...

 and banknotes of a particular government, which comprise the physical aspects of a nation's money supply
Money supply
In economics, the money supply or money stock, is the total amount of money available in an economy at a specific time. There are several ways to define "money," but standard measures usually include currency in circulation and demand deposits .Money supply data are recorded and published, usually...

. The other part of a nation's money supply consists of bank deposits (sometimes called deposit money), ownership of which can be transferred by means of cheque
Cheque
A cheque is a document/instrument See the negotiable cow—itself a fictional story—for discussions of cheques written on unusual surfaces. that orders a payment of money from a bank account...

s, debit card
Debit card
A debit card is a plastic card that provides the cardholder electronic access to his or her bank account/s at a financial institution...

s, or other forms of money transfer. Deposit money and currency are money
Money
Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past,...

 in the sense that both are acceptable as a means of payment.

Money in the form of currency has predominated in human civilizations from about 10,000 BCE on. Usually (gold
Gold
Gold is a chemical element with the symbol Au and an atomic number of 79. Gold is a dense, soft, shiny, malleable and ductile metal. Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water. Chemically, gold is a...

 or silver
Silver
Silver is a metallic chemical element with the chemical symbol Ag and atomic number 47. A soft, white, lustrous transition metal, it has the highest electrical conductivity of any element and the highest thermal conductivity of any metal...

) coins of intrinsic value (commodity money
Commodity money
Commodity money is money whose value comes from a commodity out of which it is made. It is objects that have value in themselves as well as for use as money....

) have been the norm. However, nearly all contemporary money systems are based on fiat money
Fiat money
Fiat money is money that has value only because of government regulation or law. The term derives from the Latin fiat, meaning "let it be done", as such money is established by government decree. Where fiat money is used as currency, the term fiat currency is used.Fiat money originated in 11th...

 – modern currency has value only by government order (fiat). Usually, the government declares the fiat currency (typically notes and coins issued by the central bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...

) to be legal tender
Legal tender
Legal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. Paper currency is a common form of legal tender in many countries....

, making it unlawful to not accept the fiat currency as a means of repayment for all debts, public and private.

Early currency


Currency evolved from two basic innovations, both of which had occurred by 2000 BC. Originally money was a form of receipt, representing grain stored in temple granaries in Sumer
Sumer
Sumer was a civilization and historical region in southern Mesopotamia, modern Iraq during the Chalcolithic and Early Bronze Age....

 in ancient Mesopotamia
Mesopotamia
Mesopotamia is a toponym for the area of the Tigris–Euphrates river system, largely corresponding to modern-day Iraq, northeastern Syria, southeastern Turkey and southwestern Iran.Widely considered to be the cradle of civilization, Bronze Age Mesopotamia included Sumer and the...

, then Ancient Egypt
Ancient Egypt
Ancient Egypt was an ancient civilization of Northeastern Africa, concentrated along the lower reaches of the Nile River in what is now the modern country of Egypt. Egyptian civilization coalesced around 3150 BC with the political unification of Upper and Lower Egypt under the first pharaoh...

.

This first stage of currency, where metals were used to represent stored value, and symbols to represent commodities, formed the basis of trade in the Fertile Crescent
Fertile Crescent
The Fertile Crescent, nicknamed "The Cradle of Civilization" for the fact the first civilizations started there, is a crescent-shaped region containing the comparatively moist and fertile land of otherwise arid and semi-arid Western Asia. The term was first used by University of Chicago...

 for over 1500 years. However, the collapse of the Near Eastern trading system pointed to a flaw: in an era where there was no place that was safe to store value, the value of a circulating medium could only be as sound as the forces that defended that store. Trade could only reach as far as the credibility of that military. By the late Bronze Age
Bronze Age
The Bronze Age is a period characterized by the use of copper and its alloy bronze as the chief hard materials in the manufacture of some implements and weapons. Chronologically, it stands between the Stone Age and Iron Age...

, however, a series of international treaties had established safe passage for merchants around the Eastern Mediterranean, spreading from Minoan
Minoan civilization
The Minoan civilization was a Bronze Age civilization that arose on the island of Crete and flourished from approximately the 27th century BC to the 15th century BC. It was rediscovered at the beginning of the 20th century through the work of the British archaeologist Arthur Evans...

 Crete
Crete
Crete is the largest and most populous of the Greek islands, the fifth largest island in the Mediterranean Sea, and one of the thirteen administrative regions of Greece. It forms a significant part of the economy and cultural heritage of Greece while retaining its own local cultural traits...

 and Mycenae
Mycenae
Mycenae is an archaeological site in Greece, located about 90 km south-west of Athens, in the north-eastern Peloponnese. Argos is 11 km to the south; Corinth, 48 km to the north...

 in the northwest to Elam
Elam
Elam was an ancient civilization located in what is now southwest Iran. Elam was centered in the far west and the southwest of modern-day Iran, stretching from the lowlands of Khuzestan and Ilam Province, as well as a small part of southern Iraq...

 and Bahrain
Bahrain
' , officially the Kingdom of Bahrain , is a small island state near the western shores of the Persian Gulf. It is ruled by the Al Khalifa royal family. The population in 2010 stood at 1,214,705, including 235,108 non-nationals. Formerly an emirate, Bahrain was declared a kingdom in 2002.Bahrain is...

 in the southeast. Although it is not known what functioned as a currency to facilitate these exchanges, it is thought that ox-hide shaped ingots of copper, produced in Cyprus
Cyprus
Cyprus , officially the Republic of Cyprus , is a Eurasian island country, member of the European Union, in the Eastern Mediterranean, east of Greece, south of Turkey, west of Syria and north of Egypt. It is the third largest island in the Mediterranean Sea.The earliest known human activity on the...

 may have functioned as a currency.
It is thought that the increase in piracy and raiding associated with the Bronze Age collapse
Bronze Age collapse
The Bronze Age collapse is a transition in southwestern Asia and the Eastern Mediterranean from the Late Bronze Age to the Early Iron Age that some historians believe was violent, sudden and culturally disruptive...

, possibly produced by the Peoples of the Sea, brought this trading system to an end. It was only with the recovery of Phoenician trade in the ninth and tenth centuries BC that saw a return to prosperity, and the appearance of real coinage, possibly first in Anatolia with Croesus
Croesus
Croesus was the king of Lydia from 560 to 547 BC until his defeat by the Persians. The fall of Croesus made a profound impact on the Hellenes, providing a fixed point in their calendar. "By the fifth century at least," J.A.S...

 of Lydia
Lydia
Lydia was an Iron Age kingdom of western Asia Minor located generally east of ancient Ionia in the modern Turkish provinces of Manisa and inland İzmir. Its population spoke an Anatolian language known as Lydian....

 and subsequently with the Greeks and Persians.
In Africa many forms of value store have been used including beads, ingots, ivory
Ivory
Ivory is a term for dentine, which constitutes the bulk of the teeth and tusks of animals, when used as a material for art or manufacturing. Ivory has been important since ancient times for making a range of items, from ivory carvings to false teeth, fans, dominoes, joint tubes, piano keys and...

, various forms of weapons, livestock, the manilla currency, ochre and other earth oxides, and so on. The manilla rings of West Africa
West Africa
West Africa or Western Africa is the westernmost region of the African continent. Geopolitically, the UN definition of Western Africa includes the following 16 countries and an area of approximately 5 million square km:-Flags of West Africa:...

 were one of the currencies used from the 15th century onwards to buy and sell slaves. African currency
African currency
African currency was originally formed from basic items, materials, animals and even people available in the locality to create a medium of exchange. This started to change from the 17th century onwards , as European colonial powers introduced their own monetary system into the countries they...

 is still notable for its variety, and in many places various forms of barter
Barter
Barter is a method of exchange by which goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money. It is usually bilateral, but may be multilateral, and usually exists parallel to monetary systems in most developed countries, though to a...

 still apply.

Coinage



These factors led to the shift of the store of value being the metal itself: at first silver, then both silver and gold. Metals were mined, weighed, and stamped into coins. This was to assure the individual taking the coin that he was getting a certain known weight of precious metal. Coins could be counterfeited, but they also created a new unit of account
Unit of account
A unit of account is a standard monetary unit of measurement of value/cost of goods, services, or assets. It is one of three well-known functions of money. It lends meaning to profits, losses, liability, or assets....

, which helped lead to banking. Archimedes' principle
Archimedes' principle
Archimedes' principle relates buoyancy to displacement. It is named after its discoverer, Archimedes of Syracuse.-Principle:Archimedes' treatise On floating bodies, proposition 5, states that...

 provided the next link: coins could now be easily tested for their fine
Fineness
The fineness of a precious metal refers to the ratio of the primary metal to any additives or impurities.A piece of alloy metal containing a precious metal may have the weight of its precious component referred to as its fine weight. For example, 1 troy ounce of 18 karat gold may be said to have a...

 weight of metal, and thus the value of a coin could be determined, even if it had been shaved, debased or otherwise tampered with (see Numismatics
Numismatics
Numismatics is the study or collection of currency, including coins, tokens, paper money, and related objects. While numismatists are often characterized as students or collectors of coins, the discipline also includes the broader study of money and other payment media used to resolve debts and the...

).

In most major economies using coinage, copper, silver and gold formed three tiers of coins. Gold coins were used for large purchases, payment of the military and backing of state activities. Silver coins were used for midsized transactions, and as a unit of account for taxes, dues, contracts and fealty, while copper coins represented the coinage of common transaction. This system had been used in ancient India
Indian coinage
Coinage of India, issued by Imperial dynasties and smaller middle kingdoms of India began during the 1st millennium BC, and consisted mainly of copper and silver coins in its initial stage. Scholars remain divided over the origins of Indian coinage...

 since the time of the Mahajanapadas
Mahajanapadas
Mahājanapadas , literally "great realms", were ancient Indian kingdoms or countries...

. In Europe, this system worked through the medieval period because there was virtually no new gold, silver or copper introduced through mining or conquest. Thus the overall ratios of the three coinages remained roughly equivalent.

Paper money



In premodern
History of China
Chinese civilization originated in various regional centers along both the Yellow River and the Yangtze River valleys in the Neolithic era, but the Yellow River is said to be the Cradle of Chinese Civilization. With thousands of years of continuous history, China is one of the world's oldest...

 China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...

, the need for credit and for circulating a medium that was less of a burden than exchanging thousands of copper
Copper
Copper is a chemical element with the symbol Cu and atomic number 29. It is a ductile metal with very high thermal and electrical conductivity. Pure copper is soft and malleable; an exposed surface has a reddish-orange tarnish...

 coins led to the introduction of paper money
Banknote
A banknote is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money, and in many jurisdictions is legal tender. In addition to coins, banknotes make up the cash or bearer forms of all modern fiat money...

, commonly known today as banknote
Banknote
A banknote is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money, and in many jurisdictions is legal tender. In addition to coins, banknotes make up the cash or bearer forms of all modern fiat money...

s. This economic phenomenon was a slow and gradual process that took place from the late Tang Dynasty
Tang Dynasty
The Tang Dynasty was an imperial dynasty of China preceded by the Sui Dynasty and followed by the Five Dynasties and Ten Kingdoms Period. It was founded by the Li family, who seized power during the decline and collapse of the Sui Empire...

 (618–907) into the Song Dynasty
Song Dynasty
The Song Dynasty was a ruling dynasty in China between 960 and 1279; it succeeded the Five Dynasties and Ten Kingdoms Period, and was followed by the Yuan Dynasty. It was the first government in world history to issue banknotes or paper money, and the first Chinese government to establish a...

 (960–1279). It began as a means for merchants to exchange heavy coinage for receipt
Receipt
A receipt is a written acknowledgment that a specified article or sum of money has been received as an exchange for goods or services. The receipt is evidence of purchase of the property or service obtained in the exchange.-Printed:...

s of deposit issued as promissory notes from shops of wholesalers, notes that were valid for temporary use in a small regional territory. In the 10th century, the Song Dynasty
Song Dynasty
The Song Dynasty was a ruling dynasty in China between 960 and 1279; it succeeded the Five Dynasties and Ten Kingdoms Period, and was followed by the Yuan Dynasty. It was the first government in world history to issue banknotes or paper money, and the first Chinese government to establish a...

 government began circulating these notes amongst the traders in their monopolized
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...

 salt industry. The Song government granted several shops the sole right to issue banknotes, and in the early 12th century the government finally took over these shops to produce state-issued currency. Yet the banknotes issued were still regionally valid and temporary; it was not until the mid 13th century that a standard and uniform government issue of paper money was made into an acceptable nationwide currency. The already widespread methods of woodblock printing
Woodblock printing
Woodblock printing is a technique for printing text, images or patterns used widely throughout East Asia and originating in China in antiquity as a method of printing on textiles and later paper....

 and then Pi Sheng's movable type
Movable type
Movable type is the system of printing and typography that uses movable components to reproduce the elements of a document ....

 printing
Printing
Printing is a process for reproducing text and image, typically with ink on paper using a printing press. It is often carried out as a large-scale industrial process, and is an essential part of publishing and transaction printing....

 by the 11th century was the impetus for the massive production of paper money in premodern China.

At around the same time in the medieval Islamic world
Islamic Golden Age
During the Islamic Golden Age philosophers, scientists and engineers of the Islamic world contributed enormously to technology and culture, both by preserving earlier traditions and by adding their own inventions and innovations...

, a vigorous monetary economy was created during the 7th–12th centuries on the basis of the expanding levels of circulation of a stable high-value currency (the dinar
Dinar
The dinar is the official currency of several countries.The history of the dinar dates to the gold dinar, an early Islamic coin corresponding to the Byzantine denarius auri...

). Innovations introduced by Muslim economists, traders and merchants include the earliest uses of credit
Credit (finance)
Credit is the trust which allows one party to provide resources to another party where that second party does not reimburse the first party immediately , but instead arranges either to repay or return those resources at a later date. The resources provided may be financial Credit is the trust...

, cheque
Cheque
A cheque is a document/instrument See the negotiable cow—itself a fictional story—for discussions of cheques written on unusual surfaces. that orders a payment of money from a bank account...

s, promissory note
Promissory note
A promissory note is a negotiable instrument, wherein one party makes an unconditional promise in writing to pay a determinate sum of money to the other , either at a fixed or determinable future time or on demand of the payee, under specific terms.Referred to as a note payable in accounting, or...

s, savings account
Savings account
Savings accounts are accounts maintained by retail financial institutions that pay interest but cannot be used directly as money . These accounts let customers set aside a portion of their liquid assets while earning a monetary return...

s, transactional accounts, loan
Loan
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower....

ing, trusts, exchange rate
Exchange rate
In finance, an exchange rate between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency...

s, the transfer of credit and debt
Debt
A debt is an obligation owed by one party to a second party, the creditor; usually this refers to assets granted by the creditor to the debtor, but the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value.A debt is created when a...

, and banking institutions for loans and deposit
Deposit account
A deposit account is a current account, savings account, or other type of bank account, at a banking institution that allows money to be deposited and withdrawn by the account holder. These transactions are recorded on the bank's books, and the resulting balance is recorded as a liability for the...

s.

In Europe, paper money was first introduced in Sweden
Sweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....

 in 1661. Sweden was rich in copper, thus, because of copper's low value, extraordinarily big coins (often weighing several kilograms) had to be made.

The advantages of paper currency were numerous: it reduced transport of gold and silver, and thus lowered the risks; it made loaning gold or silver at interest easier, since the specie (gold or silver) never left the possession of the lender until someone else redeemed the note; and it allowed for a division of currency into credit and specie backed forms. It enabled the sale of stock
Stock
The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...

 in joint stock companies
Joint stock company
A joint-stock company is a type of corporation or partnership involving two or more individuals that own shares of stock in the company...

, and the redemption of those shares in paper.

However, these advantages held within them disadvantages. First, since a note has no intrinsic value, there was nothing to stop issuing authorities from printing more of it than they had specie to back it with. Second, because it increased the money supply, it increased inflationary pressures, a fact observed by David Hume
David Hume
David Hume was a Scottish philosopher, historian, economist, and essayist, known especially for his philosophical empiricism and skepticism. He was one of the most important figures in the history of Western philosophy and the Scottish Enlightenment...

 in the 18th century. The result is that paper money would often lead to an inflationary bubble, which could collapse if people began demanding hard money, causing the demand for paper notes to fall to zero. The printing of paper money was also associated with wars, and financing of wars, and therefore regarded as part of maintaining a standing army
Standing army
A standing army is a professional permanent army. It is composed of full-time career soldiers and is not disbanded during times of peace. It differs from army reserves, who are activated only during wars or natural disasters...

. For these reasons, paper currency was held in suspicion and hostility in Europe and America. It was also addictive, since the speculative profits of trade and capital creation were quite large. Major nations established mints
Mint (coin)
A mint is an industrial facility which manufactures coins for currency.The history of mints correlates closely with the history of coins. One difference is that the history of the mint is usually closely tied to the political situation of an era...

 to print money and mint coins, and branches of their treasury to collect taxes and hold gold and silver stock.

At this time both silver and gold were considered legal tender
Legal tender
Legal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. Paper currency is a common form of legal tender in many countries....

, and accepted by governments for taxes. However, the instability in the ratio
Gresham's Law
Gresham's law is an economic principle that states: "When a government compulsorily overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation." It is commonly...

 between the two grew over the course of the 19th century, with the increase both in supply of these metals, particularly silver, and of trade. This is called bimetallism
Bimetallism
In economics, bimetallism is a monetary standard in which the value of the monetary unit is defined as equivalent both to a certain quantity of gold and to a certain quantity of silver; such a system establishes a fixed rate of exchange between the two metals...

 and the attempt to create a bimetallic
Bimetallism
In economics, bimetallism is a monetary standard in which the value of the monetary unit is defined as equivalent both to a certain quantity of gold and to a certain quantity of silver; such a system establishes a fixed rate of exchange between the two metals...

 standard where both gold and silver backed currency remained in circulation occupied the efforts of inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...

ists. Governments at this point could use currency as an instrument of policy, printing paper currency such as the United States Greenback
United States Note
A United States Note, also known as a Legal Tender Note, is a type of paper money that was issued from 1862 to 1971 in the U.S. Having been current for over 100 years, they were issued for longer than any other form of U.S. paper money. They were known popularly as "greenbacks" in their heyday, a...

, to pay for military expenditures. They could also set the terms at which they would redeem notes for specie, by limiting the amount of purchase, or the minimum amount that could be redeemed.

By 1900, most of the industrializing nations were on some form of gold standard, with paper notes and silver coins constituting the circulating medium. Private bank
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...

s and governments across the world followed Gresham's Law
Gresham's Law
Gresham's law is an economic principle that states: "When a government compulsorily overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation." It is commonly...

: keeping gold and silver paid, but paying out in notes. This did not happen all around the world at the same time, but occurred sporadically, generally in times of war or financial crisis, beginning in the early part of the 20th century and continuing across the world until the late 20th century, when the regime of floating fiat currencies came into force. One of the last countries to break away from the gold standard
Gold standard
The gold standard is a monetary system in which the standard economic unit of account is a fixed mass of gold. There are distinct kinds of gold standard...

 was the United States in 1971.

No country anywhere in the world today has an enforceable gold standard
Gold standard
The gold standard is a monetary system in which the standard economic unit of account is a fixed mass of gold. There are distinct kinds of gold standard...

 or silver standard
Silver standard
The silver standard is a monetary system in which the standard economic unit of account is a fixed weight of silver. The silver specie standard was widespread from the fall of the Byzantine Empire until the 19th century...

 currency system.

Banknote era



A banknote
Banknote
A banknote is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money, and in many jurisdictions is legal tender. In addition to coins, banknotes make up the cash or bearer forms of all modern fiat money...

 (more commonly known as a bill in the United States and Canada) is a type of currency, and commonly used as legal tender in many jurisdictions. With coin
Coin
A coin is a piece of hard material that is standardized in weight, is produced in large quantities in order to facilitate trade, and primarily can be used as a legal tender token for commerce in the designated country, region, or territory....

s, banknotes make up the cash
Cash
In common language cash refers to money in the physical form of currency, such as banknotes and coins.In bookkeeping and finance, cash refers to current assets comprising currency or currency equivalents that can be accessed immediately or near-immediately...

 form of all money
Money
Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past,...

. Mostly paper, Australia's Commonwealth Scientific and Industrial Research Organisation
Commonwealth Scientific and Industrial Research Organisation
The Commonwealth Scientific and Industrial Research Organisation is the national government body for scientific research in Australia...

 developed the world's first polymer currency
Polymer banknote
Polymer banknotes were developed by the Reserve Bank of Australia , Commonwealth Scientific and Industrial Research Organisation and The University of Melbourne and were first issued as currency in Australia in 1988. These banknotes are made from the polymer biaxially-oriented polypropylene ...

 in the 1980s that went into circulation on the nation's bicentenary in 1988. Now used in some 22 countries (over 40 if counting commemorative issues), polymer currency
Polymer banknote
Polymer banknotes were developed by the Reserve Bank of Australia , Commonwealth Scientific and Industrial Research Organisation and The University of Melbourne and were first issued as currency in Australia in 1988. These banknotes are made from the polymer biaxially-oriented polypropylene ...

 dramatically improves the life span of banknotes and prevents counterfeiting.

Modern currencies


To find out which currency is used in a particular country, check list of circulating currencies.

Currently, the International Organization for Standardization
International Organization for Standardization
The International Organization for Standardization , widely known as ISO, is an international standard-setting body composed of representatives from various national standards organizations. Founded on February 23, 1947, the organization promulgates worldwide proprietary, industrial and commercial...

 has introduced a three-letter system of codes (ISO 4217
ISO 4217
ISO 4217 is a standard published by the International Standards Organization, which delineates currency designators, country codes , and references to minor units in three tables:* Table A.1 – Current currency & funds code list...

) to define currency (as opposed to simple names or currency sign
Currency sign
A currency sign is a graphic symbol used as a shorthand for a currency's name, especially in reference to amounts of money. They typically employ the first letter or character of the currency, sometimes with minor changes such as ligatures or overlaid vertical or horizontal bars...

s), in order to remove the confusion that there are dozens of currencies called the dollar
Dollar
The dollar is the name of the official currency of many countries, including Australia, Belize, Canada, Ecuador, El Salvador, Hong Kong, New Zealand, Singapore, Taiwan, and the United States.-Etymology:...

 and many called the franc
Franc
The franc is the name of several currency units, most notably the Swiss franc, still a major world currency today due to the prominence of Swiss financial institutions and the former currency of France, the French franc until the Euro was adopted in 1999...

. Even the pound is used in nearly a dozen different countries, all, of course, with wildly differing values. In general, the three-letter code uses the ISO 3166-1
ISO 3166-1
ISO 3166-1 is part of the ISO 3166 standard published by the International Organization for Standardization , and defines codes for the names of countries, dependent territories, and special areas of geographical interest. The official name of the standard is Codes for the representation of names...

 country code for the first two letters and the first letter of the name of the currency (D for dollar, for instance) as the third letter. United States currency, for instance is globally referred to as USD.

The International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...

 uses a variant system when referring to national currencies.

Control and production


In most cases, each private central bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...

 has monopoly
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...

 control over the supply and production of its own currency. To facilitate trade
International trade
International trade is the exchange of capital, goods, and services across international borders or territories. In most countries, such trade represents a significant share of gross domestic product...

 between these currency zones, there are different exchange rate
Exchange rate
In finance, an exchange rate between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency...

s, which are the prices at which currencies (and the goods and services of individual currency zones) can be exchanged against each other. Currencies can be classified as either floating currencies or fixed currencies based on their exchange rate regime
Exchange rate regime
The exchange-rate regime is the way a country manages its currency in relation to other currencies and the foreign exchange market. It is closely related to monetary policy and the two are generally dependent on many of the same factors....

.

In cases where a country does have control of its own currency, that control is exercised either by a central bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...

 or by a Ministry of Finance
Finance minister
The finance minister is a cabinet position in a government.A minister of finance has many different jobs in a government. He or she helps form the government budget, stimulate the economy, and control finances...

. In either case, the institution that has control of monetary policy is referred to as the monetary authority. Monetary authorities have varying degrees of autonomy from the governments that create them. In the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

, the Federal Reserve System
Federal Reserve System
The Federal Reserve System is the central banking system of the United States. It was created on December 23, 1913 with the enactment of the Federal Reserve Act, largely in response to a series of financial panics, particularly a severe panic in 1907...

 operates without direct oversight by the legislative or executive branches. A monetary authority is created and supported by its sponsoring government, so independence can be reduced by the legislative or executive authority that creates it.

Several countries can use the same name for their own distinct currencies (for example,, dollar in Canada
Canadian dollar
The Canadian dollar is the currency of Canada. As of 2007, the Canadian dollar is the 7th most traded currency in the world. It is abbreviated with the dollar sign $, or C$ to distinguish it from other dollar-denominated currencies...

 and the United States
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....

). By contrast, several countries can also use the same currency (for example,, the euro
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...

), or one country can declare the currency of another country to be legal tender
Legal tender
Legal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. Paper currency is a common form of legal tender in many countries....

. For example, Panama
Panama
Panama , officially the Republic of Panama , is the southernmost country of Central America. Situated on the isthmus connecting North and South America, it is bordered by Costa Rica to the northwest, Colombia to the southeast, the Caribbean Sea to the north and the Pacific Ocean to the south. The...

 and El Salvador
El Salvador
El Salvador or simply Salvador is the smallest and the most densely populated country in Central America. The country's capital city and largest city is San Salvador; Santa Ana and San Miguel are also important cultural and commercial centers in the country and in all of Central America...

 have declared U.S. currency to be legal tender, and from 1791–1857, Spanish silver coins were legal tender in the United States. At various times countries have either re-stamped foreign coins, or used currency board
Currency board
A currency board is a monetary authority which is required to maintain a fixed exchange rate with a foreign currency. This policy objective requires the conventional objectives of a central bank to be subordinated to the exchange rate target....

 issuing one note of currency for each note of a foreign government held, as Ecuador
Ecuador
Ecuador , officially the Republic of Ecuador is a representative democratic republic in South America, bordered by Colombia on the north, Peru on the east and south, and by the Pacific Ocean to the west. It is one of only two countries in South America, along with Chile, that do not have a border...

 currently does.

Each currency typically has a main currency unit (the dollar
Dollar
The dollar is the name of the official currency of many countries, including Australia, Belize, Canada, Ecuador, El Salvador, Hong Kong, New Zealand, Singapore, Taiwan, and the United States.-Etymology:...

, for example, or the euro
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...

) and a fractional currency, often valued at of the main currency: 100 cent
Cent (currency)
In many national currencies, the cent is a monetary unit that equals 1⁄100 of the basic monetary unit. Etymologically, the word cent derives from the Latin word "centum" meaning hundred. Cent also refers to a coin which is worth one cent....

s = 1 dollar
Dollar
The dollar is the name of the official currency of many countries, including Australia, Belize, Canada, Ecuador, El Salvador, Hong Kong, New Zealand, Singapore, Taiwan, and the United States.-Etymology:...

, 100 centime
Centime
Centime is French for "cent", and is used in English as the name of the fraction currency in several Francophone countries ....

s = 1 franc
Franc
The franc is the name of several currency units, most notably the Swiss franc, still a major world currency today due to the prominence of Swiss financial institutions and the former currency of France, the French franc until the Euro was adopted in 1999...

, 100 pence
British One Penny coin
The British decimal one penny coin, produced by the Royal Mint, was issued on 15 February 1971, the day the British currency was decimalised. In practice, it had been available from banks in bags of £1 for some weeks previously...

 = 1 pound
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...

, although units of or are also common. Some currencies do not have any smaller units at all, such as the Icelandic króna
Icelandic króna
The króna is the currency of Iceland. The króna is technically subdivided into 100 aurar , but in practice this subdivision is no longer used....

.

Mauritania
Mauritania
Mauritania is a country in the Maghreb and West Africa. It is bordered by the Atlantic Ocean in the west, by Western Sahara in the north, by Algeria in the northeast, by Mali in the east and southeast, and by Senegal in the southwest...

 and Madagascar
Madagascar
The Republic of Madagascar is an island country located in the Indian Ocean off the southeastern coast of Africa...

 are the only remaining countries that do not use the decimal system; instead, the Mauritanian ouguiya
Mauritanian ouguiya
The ouguiya , also spelt "ougiya," is the currency of Mauritania. It is the only circulating currency other than the Malagasy ariary whose division units are not based on a power of ten, each ouguiya comprising five khoums .The ouguiya was introduced in 1973, replacing the CFA franc at a rate of 1...

 is divided into 5 khoums
Khoums
The khoums is the subdivisory unit of the Mauritanian monetary system, the Ouguiya. Five khoums make an ouguiya, hence one khoums can be expressed as MRO/0.2...

, while the Malagasy
Madagascar
The Republic of Madagascar is an island country located in the Indian Ocean off the southeastern coast of Africa...

 ariary
Malagasy ariary
The ariary is the currency of Madagascar. It is subdivided into 5 iraimbilanja and is one of only two non-decimal currencies currently circulating . The names ariary and iraimbilanja derive from the pre-colonial currency, with ariary being the name for a silver dollar...

 is divided into 5 iraimbilanja
Iraimbilanja
The iraimbilanja is the divisory currency unit of Madagascar, being equal to one fifth of an ariary. The old Malagasy franc is equal in value to one iraimbilanja. As of early 2011 the value of one iraimbilanja is about US$0.0000989....

. In these countries, words like dollar or pound "were simply names for given weights of gold." Due to inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...

 khoums and iraimbilanja have in practice fallen into disuse. (See non-decimal currencies
Non-decimal currencies
A non-decimal currency is a currency which has sub-units that are a non-decimal fraction of the main unit, i.e. the number of sub-units in a main unit is not a power of 10.- Contemporary non-decimal currencies :...

 for other historic currencies with non-decimal divisions).

Currency Convertibility


Convertibility of a currency determines the ability of an individual, corporate or government to convert its local currency to another currency or vice versa with or without central bank/government intervention. Based on the above restrictions or free and readily conversion features currencies are classified as:
  • Fully Convertible - When there are no restrictions or limitations on the amount of currency that can be traded on the international market, and the government does not artificially impose a fixed value or minimum value on the currency in international trade. The US dollar is an example of a fully convertible currency and for this reason, US dollars are one of the major currencies traded in the FOREX market.
  • Partially Convertible - Central Banks control over international investments flowing in and out of the country, while most domestic trade transactions are handled without any special requirements, there are significant restrictions on international investing and special approval is often required in order to convert into other currencies. Indian Rupee is an example for partially convertible currency.
  • Nonconvertible - Neither participate in the international FOREX market nor allow conversion of these currencies by individuals or companies. As a result, these currencies are known as blocked currencies. e.g.: North Korean Won
    North Korean won
    The won is the currency of North Korea . It is subdivided into 100 chon. The won is issued by the Central Bank of the Democratic People's Republic of Korea...

     and the Cuban Peso
    Cuban peso
    The peso is one of two official currencies in use in Cuba, the other being the convertible peso...


Local currencies



In economics, a local currency is a currency not backed by a national government, and intended to trade only in a small area. Advocates such as Jane Jacobs
Jane Jacobs
Jane Jacobs, was an American-Canadian writer and activist with primary interest in communities and urban planning and decay. She is best known for The Death and Life of Great American Cities , a powerful critique of the urban renewal policies of the 1950s in the United States...

 argue that this enables an economically depressed region to pull itself up, by giving the people living there a medium of exchange that they can use to exchange services and locally produced goods (In a broader sense, this is the original purpose of all money.) Opponents of this concept argue that local currency creates a barrier which can interfere with economies of scale and comparative advantage, and that in some cases they can serve as a means of tax evasion
Tax evasion
Tax evasion is the general term for efforts by individuals, corporations, trusts and other entities to evade taxes by illegal means. Tax evasion usually entails taxpayers deliberately misrepresenting or concealing the true state of their affairs to the tax authorities to reduce their tax liability,...

.

Local currencies can also come into being when there is economic turmoil involving the national currency. An example of this is the Argentinian economic crisis of 2002 in which IOUs issued by local governments quickly took on some of the characteristics of local currencies.

Proposed currencies

  • Amero: American currency union
    American currency union
    The North American Currency Union is a theoretical economic and monetary union of three North American countries: Canada, the United States and Mexico....

     (hypothetical)
  • Asian Currency Unit: proposed for the ASEAN +3
  • Bancor
    Bancor
    The Bancor was a supranational currency that John Maynard Keynes and E. F. Schumacher conceptualised in the years 1940-42 and which the United Kingdom proposed to introduce after the Second World War...

    : an international currency proposed by John Maynard Keynes
    John Maynard Keynes
    John Maynard Keynes, Baron Keynes of Tilton, CB FBA , was a British economist whose ideas have profoundly affected the theory and practice of modern macroeconomics, as well as the economic policies of governments...

     in the negotiations that established the Bretton Woods system
    Bretton Woods system
    The Bretton Woods system of monetary management established the rules for commercial and financial relations among the world's major industrial states in the mid 20th century...

     (never implemented)
  • Currency for Caribbean area—CARICOM states except the Bahamas.
  • East African shilling
    East African shilling
    The shilling was the currency issued for use in British controlled areas in East Africa from 1921 until 1969. It was produced by the East African Currency Board...

    : East African Community
    East African Community
    The East African Community is an intergovernmental organisation comprising the five east African countries Burundi, Kenya, Rwanda, Tanzania, and Uganda. Pierre Nkurunziza, the President of the Republic of Burundi, is the current Chairman of the East African Community. The EAC was originally...

     (Burundi
    Burundi
    Burundi , officially the Republic of Burundi , is a landlocked country in the Great Lakes region of Eastern Africa bordered by Rwanda to the north, Tanzania to the east and south, and the Democratic Republic of the Congo to the west. Its capital is Bujumbura...

    , Kenya
    Kenya
    Kenya , officially known as the Republic of Kenya, is a country in East Africa that lies on the equator, with the Indian Ocean to its south-east...

    , Rwanda
    Rwanda
    Rwanda or , officially the Republic of Rwanda , is a country in central and eastern Africa with a population of approximately 11.4 million . Rwanda is located a few degrees south of the Equator, and is bordered by Uganda, Tanzania, Burundi and the Democratic Republic of the Congo...

    , Tanzania
    Tanzania
    The United Republic of Tanzania is a country in East Africa bordered by Kenya and Uganda to the north, Rwanda, Burundi, and the Democratic Republic of the Congo to the west, and Zambia, Malawi, and Mozambique to the south. The country's eastern borders lie on the Indian Ocean.Tanzania is a state...

    , Uganda
    Uganda
    Uganda , officially the Republic of Uganda, is a landlocked country in East Africa. Uganda is also known as the "Pearl of Africa". It is bordered on the east by Kenya, on the north by South Sudan, on the west by the Democratic Republic of the Congo, on the southwest by Rwanda, and on the south by...

    )
  • Eco
    Eco (currency)
    The Eco is the proposed name for the common currency that the West African Monetary Zone plans to introduce in the framework of ECOWAS. Originally the introduction of the currency was planned for December 1, 2009, however this date was revised to 2015. The original five member states are the...

    : West African Monetary Zone (Gambia, Ghana
    Ghana
    Ghana , officially the Republic of Ghana, is a country located in West Africa. It is bordered by Côte d'Ivoire to the west, Burkina Faso to the north, Togo to the east, and the Gulf of Guinea to the south...

    , Guinea
    Guinea
    Guinea , officially the Republic of Guinea , is a country in West Africa. Formerly known as French Guinea , it is today sometimes called Guinea-Conakry to distinguish it from its neighbour Guinea-Bissau. Guinea is divided into eight administrative regions and subdivided into thirty-three prefectures...

    , Nigeria
    Nigeria
    Nigeria , officially the Federal Republic of Nigeria, is a federal constitutional republic comprising 36 states and its Federal Capital Territory, Abuja. The country is located in West Africa and shares land borders with the Republic of Benin in the west, Chad and Cameroon in the east, and Niger in...

    , Sierra Leone
    Sierra Leone
    Sierra Leone , officially the Republic of Sierra Leone, is a country in West Africa. It is bordered by Guinea to the north and east, Liberia to the southeast, and the Atlantic Ocean to the west and southwest. Sierra Leone covers a total area of and has an estimated population between 5.4 and 6.4...

    , possibly Liberia
    Liberia
    Liberia , officially the Republic of Liberia, is a country in West Africa. It is bordered by Sierra Leone on the west, Guinea on the north and Côte d'Ivoire on the east. Liberia's coastline is composed of mostly mangrove forests while the more sparsely populated inland consists of forests that open...

    )
  • Khaleeji (currency)
    Khaleeji (currency)
    The Khaleeji was a proposed name for the common currency of the member states of the GCC or Cooperation Council for the Arab States of the Gulf, except for Oman, and the U.A.E.. The term 'Khaleeji' is Arabic for "of the Gulf", and is traditionally associated with the Arab states of the Persian Gulf...

    : Gulf Cooperation Council
    Cooperation Council for the Arab States of the Gulf
    The Cooperation Council for the Arab States of the Gulf , also known as the Gulf Cooperation Council , is a political and economic union of the Arab states bordering the Persian Gulf and constituting the Arabian Peninsula, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates...

     (Bahrain
    Bahrain
    ' , officially the Kingdom of Bahrain , is a small island state near the western shores of the Persian Gulf. It is ruled by the Al Khalifa royal family. The population in 2010 stood at 1,214,705, including 235,108 non-nationals. Formerly an emirate, Bahrain was declared a kingdom in 2002.Bahrain is...

    , Kuwait
    Kuwait
    The State of Kuwait is a sovereign Arab state situated in the north-east of the Arabian Peninsula in Western Asia. It is bordered by Saudi Arabia to the south at Khafji, and Iraq to the north at Basra. It lies on the north-western shore of the Persian Gulf. The name Kuwait is derived from the...

    , Oman
    Oman
    Oman , officially called the Sultanate of Oman , is an Arab state in southwest Asia on the southeast coast of the Arabian Peninsula. It is bordered by the United Arab Emirates to the northwest, Saudi Arabia to the west, and Yemen to the southwest. The coast is formed by the Arabian Sea on the...

    , Qatar
    Qatar
    Qatar , also known as the State of Qatar or locally Dawlat Qaṭar, is a sovereign Arab state, located in the Middle East, occupying the small Qatar Peninsula on the northeasterly coast of the much larger Arabian Peninsula. Its sole land border is with Saudi Arabia to the south, with the rest of its...

    , Saudi Arabia
    Saudi Arabia
    The Kingdom of Saudi Arabia , commonly known in British English as Saudi Arabia and in Arabic as as-Sa‘ūdiyyah , is the largest state in Western Asia by land area, constituting the bulk of the Arabian Peninsula, and the second-largest in the Arab World...

    , United Arab Emirates
    United Arab Emirates
    The United Arab Emirates, abbreviated as the UAE, or shortened to "the Emirates", is a state situated in the southeast of the Arabian Peninsula in Western Asia on the Persian Gulf, bordering Oman, and Saudi Arabia, and sharing sea borders with Iraq, Kuwait, Bahrain, Qatar, and Iran.The UAE is a...

    )
  • Metica
    Mozambican metica
    The metica was a proposed currency for Mozambique. It was divided into 100 centimos. Coins were produced dated 1975 and banknotes dated 1976. However, these were not put into circulation and the escudo continued to circulate until 1980, when the metical was introduced....

    : Mozambique
    Mozambique
    Mozambique, officially the Republic of Mozambique , is a country in southeastern Africa bordered by the Indian Ocean to the east, Tanzania to the north, Malawi and Zambia to the northwest, Zimbabwe to the west and Swaziland and South Africa to the southwest...

     (never implemented)
  • Perun
    Montenegrin perun
    The perun was the currency that was planned for introduction in Montenegro by Petar II Petrović Njegoš in 1851. However, he died the same year, and Montenegro remained without a currency until the 1906 introduction of the perper by Nicholas I of Montenegro...

    : Montenegro
    Montenegro
    Montenegro Montenegrin: Crna Gora Црна Гора , meaning "Black Mountain") is a country located in Southeastern Europe. It has a coast on the Adriatic Sea to the south-west and is bordered by Croatia to the west, Bosnia and Herzegovina to the northwest, Serbia to the northeast and Albania to the...

     (never implemented)
  • Gaucho (currency)
    Gaucho (currency)
    The Gaucho was the name of a currency intended to be used by Argentina and Brazil in the context of the Argentina-Brazil Integration and Economics Cooperation Program or PICE to make interregional payments...

    : Currency for bilateral commerce (never implemented)
  • Toman
    Iranian toman
    The toman , is a superunit of the official currency of Iran, the rial. Toman, derived from a Mongolian word meaning ten thousand , was the currency of Iran until 1932. It was divided into 10,000 dinar. Between 1798 and 1825, the toman was also subdivided into 8 rial, each of 1250 dinar...

    : The new currency that is proposed by the Central Bank of Iran which would replace the Iranian Rial
    Iranian rial
    The rial is the currency of Iran. It is subdivided into 100 dinar but, because of the very low current value of the rial, no fraction of the rial is used in accounting....

     by slashing four zeros off the country's national currency.
  • Caribbean guilder
    Caribbean guilder
    The Caribbean guilder is the proposed currency of the Caribbean islands of Curaçao and Sint Maarten which formed after the dissolution of the Netherlands Antilles in October 2010. The Netherlands Antillean guilder is expected continue to circulate until 2013 as the currency was not finalised in...

    , the new currency for Curaçao
    Curaçao
    Curaçao is an island in the southern Caribbean Sea, off the Venezuelan coast. The Country of Curaçao , which includes the main island plus the small, uninhabited island of Klein Curaçao , is a constituent country of the Kingdom of the Netherlands...

     and Sint Maarten for 2012 replacing the Netherlands Antillean guilder.

See also


Related concepts
  • Counterfeit money
    Counterfeit money
    Counterfeit money is currency that is produced without the legal sanction of the state or government to resemble some official form of currency closely enough that it may be confused for genuine currency. Producing or using counterfeit money is a form of fraud or forgery. Counterfeiting is probably...

  • Currency transaction tax
    Currency transaction tax
    A currency transaction tax is a tax placed on a specific type of currency transaction for a specific purpose. This term has been most commonly associated with the financial sector, as opposed to consumption taxes paid by consumers....

  • Foreign exchange market
    Foreign exchange market
    The foreign exchange market is a global, worldwide decentralized financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends...

  • Foreign exchange reserves
    Foreign exchange reserves
    Foreign-exchange reserves in a strict sense are 'only' the foreign currency deposits and bonds held by central banks and monetary authorities. However, the term in popular usage commonly includes foreign exchange and gold, Special Drawing Rights and International Monetary Fund reserve positions...

     
  • History of money
    History of money
    The history of money spans thousands of years. Numismatics is the scientific study of money and its history in all its varied forms.Many items have been used as commodity money such as natural scarce precious metals, cowry shells, barley, beads etc., as well as many other things that are thought of...

  • Mutilated currency
    Mutilated currency
    Mutilated currency is a term used by the United States Bureau of Engraving and Printing to describe currency which is very badly damaged, to the point where it is difficult to determine the value of the currency, or where it is not clear that at least half of the note is present...

  • Optimum currency area
    Optimum currency area
    In economics, an optimum currency area , also known as an optimal currency region , is a geographical region in which it would maximize economic efficiency to have the entire region share a single currency. It describes the optimal characteristics for the merger of currencies or the creation of a...

  • Slang terms for money
    Slang terms for money
    Slang terms for money often derive from the appearance and features of banknotes or coins, their values, historical associations or the units of currency concerned...

  • World currency
    World currency
    In the foreign exchange market and international finance, a world currency, supranational currency, or global currency refers to a currency in which the vast majority of international transactions take place and which serves as the world's primary reserve currency...



Accounting units
  • Currency pair
    Currency pair
    A currency pair is the quotation of the relative value of a currency unit against the unit of another currency in the foreign exchange market. The currency that is used as the reference is called the counter currency or quote currency and the currency that is quoted in relation is called the base...

  • Currency sign
    Currency sign
    A currency sign is a graphic symbol used as a shorthand for a currency's name, especially in reference to amounts of money. They typically employ the first letter or character of the currency, sometimes with minor changes such as ligatures or overlaid vertical or horizontal bars...

  • Currency strength
    Currency strength
    Currency strength expresses the value of currency. For economists, it is often calculated as purchasing power, while for financial traders, it can be described as an indicator, reflecting many factors related to the currency; for example, fundamental data, overall economic performance or interest...

  • European Currency Unit
    European Currency Unit
    The European Currency Unit was a basket of the currencies of the European Community member states, used as the unit of account of the European Community before being replaced by the euro on 1 January 1999, at parity. The ECU itself replaced the European Unit of Account, also at parity, on 13...

     
  • Fictional currency
    Fictional currency
    A fictional currency is some form of defined or alluded currency in works of fiction. The names of such units of currency are sometimes based on extant or historic currencies while others, such as "Kalganids" in Asimov's Foundation series, may be wholly invented...

  • Franc Poincaré
    Franc Poincaré
    The Franc Poincaré is a unit of account that was used in the international regulation of liability. It is defined as 65.5 milligrams of gold of millesimal fineness .900...

  • Local currencies
  • Petrocurrency
    Petrocurrency
    Petrocurrency is a portmanteau neologism used with three distinct meanings, though often confused:#Trading surpluses of oil producing nations, originally called petrodollars...

  • Special Drawing Rights
    Special Drawing Rights
    Special Drawing Rights are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund . Not a currency, SDRs instead represent a claim to currency held by IMF member countries for which they may be exchanged...



Lists