These factors led to the metal itself being the store of value: first silver, then both silver and gold, and at one point also bronze. Now we have copper coins and other non-precious metals as coins. 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, which helped lead to "banking. "Archimedes' principle provided the next link: coins could now be easily tested for their "fine 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).
Most major economies using coinage had several tiers of coins, using a mix of copper, silver and gold. Gold coins were used for large purchases, payment of the military and backing of state activities; they were more often used as measures of account than physical coins. Silver coins were used for midsized transactions, and as a unit of account for taxes, dues, contracts and fealty, while coins of copper, silver, or some mixture thereof (see "debasement), were used for everyday transactions. This system had been used in ancient "India since the time of the "Mahajanapadas. The exact ratio in value of the three metals varied greatly in different eras and places; for example, the opening of silver mines in the "Harz mountains of central Europe made silver relatively less valuable, as did the flood of "New World silver "after the Spanish conquests. However, the rarity of gold consistently made it more valuable than silver, and likewise silver was consistently worth more than copper.
In "premodern "China, the need for credit and for a medium of exchange that was less physically cumbersome than large numbers of "copper coins led to the introduction of "paper money, i.e. "banknotes. Their introduction was a gradual process which lasted from the late "Tang dynasty (618–907) into the "Song dynasty (960–1279). It began as a means for merchants to exchange heavy coinage for "receipts of deposit issued as "promissory notes by "wholesalers' shops. These notes were valid for temporary use in a small regional territory. In the 10th century, the "Song dynasty government began to circulate these notes amongst the traders in its "monopolized salt industry. The Song government granted several shops the 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 only locally and temporarily valid: it was not until the mid 13th century that a standard and uniform government issue of paper money became an acceptable nationwide currency. The already widespread methods of "woodblock printing and then "Pi Sheng's "movable type "printing by the 11th century were the impetus for the mass production of paper money in premodern China.
At around the same time in the "medieval Islamic world, 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). Innovations introduced by Muslim economists, traders and merchants include the earliest uses of "credit, "cheques, "promissory notes, "savings accounts, "transactional accounts, "loaning, "trusts, "exchange rates, the transfer of credit and "debt, and "banking institutions for loans and "deposits.
In Europe, paper money was first introduced on a regular basis in "Sweden in 1661 (although "Washington Irving records an earlier emergency use of it, by the Spanish in a siege during the "Conquest of Granada). As Sweden was rich in copper, its low value necessitated extraordinarily big coins, often weighing several kilograms.
The advantages of paper currency were numerous: it reduced the need to transport gold and silver, which was risky; it facilitated loans of gold or silver at interest, since the underlying "specie (gold or silver) never left the possession of the lender until someone else redeemed the note; and it allowed a division of currency into credit and specie backed forms. It enabled the sale of "stock in "joint-stock companies, and the redemption of those "shares in paper.
But there were also disadvantages. First, since a note has no intrinsic value, there was nothing to stop issuing authorities from printing more notes than they had specie to back them with. Second, because it increased the money supply, it increased inflationary pressures, a fact observed by "David Hume in the 18th century. Thus 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. 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 to print money and mint coins, and branches of their treasury to collect taxes and hold gold and silver stock.
At that time, both silver and gold were considered "legal tender, and accepted by governments for taxes. However, the "instability in the ratio between the two grew over the course of the 19th century, with the increases both in supply of these metals, particularly silver, and in trade. The parallel use of both metals is called "bimetallism, and the attempt to create a "bimetallic standard where both gold and silver backed currency remained in circulation occupied the efforts of "inflationists. Governments at this point could use currency as an instrument of policy, printing paper currency such as the United States "Greenback, 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 "banks and governments across the world followed "Gresham's Law: keeping the gold and silver they received, 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 was the United States in 1971, an action known as the "Nixon shock. No country has an enforceable gold standard or "silver standard currency system.
A "banknote (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 "coins, banknotes make up the "cash form of all "money. Banknotes are mostly paper, but Australia's "Commonwealth Scientific and Industrial Research Organisation developed the world's first "polymer currency 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 dramatically improves the life span of banknotes and prevents counterfeiting.
|Rank||Currency||"ISO 4217 code
| % daily share
|"United States dollar||
|"New Zealand dollar||
|"Hong Kong dollar||
|"South Korean won||
|"South African rand||
Currency use is based on the concept of "lex monetae; that a sovereign state decides which currency it shall use. Currently, the "International Organization for Standardization has introduced a three-letter system of codes ("ISO 4217) to define currency (as opposed to simple names or "currency signs), in order to remove the confusion that there are dozens of currencies called the "dollar and many called the "franc. Even the "pound is used in nearly a dozen different countries; most of these are tied to the "Pound Sterling, while the remainder have varying values. In general, the three-letter code uses the "ISO 3166-1 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 uses a variant system when referring to national currencies.
Distinct from centrally controlled government-issued currencies, private decentralized trust networks support alternative currencies such as "Bitcoin, "Litecoin, "Peercoin or "Dogecoin, as well as "branded currencies, for example 'obligation' based stores of value, such as quasi-regulated BarterCard, Loyalty Points (Credit Cards, Airlines) or Game-Credits (MMO games) that are based on reputation of commercial products, or highly regulated 'asset backed' 'alternative currencies' such as mobile-money schemes like MPESA (called E-Money Issuance).
Currency may be Internet-based and digital, for instance, "Bitcoin and not tied to any specific country, or the IMF's SDR that is based on a basket of currencies (and assets held).
Control and production
In most cases, a "central bank has a "monopoly right to issue of coins and banknotes ("fiat money) for its own area of circulation (a country or group of countries); it regulates the production of currency by banks ("credit) through "monetary policy.
An "exchange rate is the price at which two currencies can be exchanged against each other. This is used for "trade between the two currency zones. Exchange rates can be classified as either "floating or "fixed. In the former, day-to-day movements in exchange rates are determined by the market; in the latter, governments intervene in the market to buy or sell their currency to balance supply and demand at a fixed exchange rate.
In cases where a country has control of its own currency, that control is exercised either by a "central bank or by a "Ministry of Finance. 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, the "Federal Reserve System 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 separate currencies (for example, dollar in "Australia, "Canada and the "United States). By contrast, several countries can also use the same currency (for example, the "euro or the "CFA franc), or one country can declare the currency of another country to be "legal tender. For example, "Panama and "El Salvador have declared U.S. currency to be legal tender, and from 1791 to 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 issuing one note of currency for each note of a foreign government held, as "Ecuador currently does.
Each currency typically has a main currency unit (the "dollar, for example, or the "euro) and a fractional unit, often defined as 1⁄100 of the main unit: 100 "cents = 1 "dollar, 100 "centimes = 1 "franc, 100 "pence = 1 "pound, although units of 1⁄10 or 1⁄1000 occasionally also occur. Some currencies do not have any smaller units at all, such as the "Icelandic króna.
"Mauritania and "Madagascar are the only remaining countries that do not use the decimal system; instead, the "Mauritanian ouguiya is in theory divided into 5 "khoums, while the "Malagasy ariary is theoretically divided into 5 "iraimbilanja. In these countries, words like dollar or pound "were simply names for given weights of gold." Due to "inflation khoums and iraimbilanja have in practice fallen into disuse. (See "non-decimal currencies for other historic currencies with non-decimal divisions.)
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 "foreign exchange market.
- Partially convertible
- Central banks control 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. The Indian rupee is an example of a partially convertible currency.
- 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 and the "Cuban peso.
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 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.
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.
One of the best examples of a local currency is the original "LETS currency, founded on Vancouver Island in the early 1980s. In 1982, the Canadian Central Bank’s lending rates ran up to 14% which drove chartered bank lending rates as high as 19%. The resulting currency and credit scarcity left island residents with few options other than to create a local currency. 
List of Major World Payments Currencies
The following table are estimates for 15 most frequently used currencies in World Payments from 2012 to 2015 by "SWIFT. 
|1||" "Euro||44.04%||" "Euro||40.17%||" "United States dollar||38.75%||" "United States dollar||43.41%||" "United States dollar||42.68%|
|2||" "United States dollar||29.73%||" "United States dollar||33.48%||" "Euro||33.52%||" "Euro||28.75%||" "Euro||29.50%|
|3||" "Pound sterling||9.00%||" "Pound sterling||8.55%||" "Pound sterling||9.37%||" "Pound sterling||8.24%||" "Pound sterling||8.88%|
|4||" "Japanese yen||2.48%||" "Japanese yen||2.56%||" "Japanese yen||2.50%||" "Japanese yen||2.79%||" "Japanese yen||2.68%|
|5||" "Australian dollar||2.08%||" "Australian dollar||1.85%||" "Canadian dollar||1.80%||" "Renminbi||2.06%||" "Renminbi||2.28%|
|6||" "Canadian dollar||1.81%||" "Swiss franc||1.83%||" "Australian dollar||1.75%||" "Canadian dollar||1.91%||" "Australian dollar||1.77%|
|7||" "Swiss franc||1.36%||" "Canadian dollar||1.80%||" "Renminbi||1.39%||" "Swiss franc||1.91%||" "Canadian dollar||1.70%|
|8||" "Swedish krona||1.05%||" "Singapore dollar||1.05%||" "Swiss franc||1.38%||" "Australian dollar||1.74%||" "Swiss franc||1.64%|
|9||" "Singapore dollar||1.03%||" "Hong Kong dollar||1.02%||" "Hong Kong dollar||1.09%||" "Hong Kong dollar||1.28%||" "Hong Kong dollar||1.17%|
|10||" "Hong Kong dollar||0.95%||" "Thai baht||0.97%||" "Thai baht||0.98%||" "Thai baht||0.98%||" "Thai baht||0.98%|
|11||" "Norwegian krone||0.93%||" "Swedish krona||0.96%||" "Swedish krona||0.97%||" "Singapore dollar||0.89%||" "Singapore dollar||0.92%|
|12||" "Thai baht||0.82%||" "Norwegian krone||0.80%||" "Singapore dollar||0.88%||" "Swedish krona||0.80%||" "Swedish krona||0.86%|
|13||" "Danish krone||0.54%||" "Renminbi||0.63%||" "Norwegian krone||0.80%||" "Norwegian krone||0.68%||" "Norwegian krone||0.76%|
|14||" "Russian ruble||0.52%||" "Danish krone||0.58%||" "Danish krone||0.60%||" "Danish krone||0.56%||" "Polish złoty||0.50%|
|15||" "South African rand||0.48%||" "Russian ruble||0.56%||" "Polish złoty||0.58%||" "Polish złoty||0.55%||" "Danish krone||0.47%|
- "Amero, in an "American currency union.
- "Asian Currency Unit, proposed for the "ASEAN +3 or the "East Asian Community.
- "Bancor, an international currency proposed by "John Maynard Keynes in the negotiations that established the "Bretton Woods system.
- "CARICOM currency, for Caribbean states (except the "Bahamas).
- "Caribbean guilder, to replace the "Netherlands Antillean guilder in "Curaçao and "Sint Maarten.["needs update]
- "East African shilling, for the "East African Community ("Burundi, "Kenya, "Rwanda, "Tanzania, "Uganda).
- "Eco, for the "West African Monetary Zone ("Gambia, "Ghana, "Guinea, "Nigeria, "Sierra Leone, possibly "Liberia).
- "Gaucho, between "Argentina and "Brazil.
- "Khaleeji, for the "Gulf Cooperation Council ("Bahrain, "Kuwait, "Oman, "Qatar, "Saudi Arabia, "United Arab Emirates).
- "Metica, in "Mozambique.
- "Perun, in "Montenegro.
- "Spesmilo, pre-"World War I international decimal currency.
- "Stelo, 1945–1993 monetary unit used by "Esperantists
- "Toman, a replacement for the "Iranian rial proposed by the "Central Bank of Iran.
- "Currency". The Free Dictionary.
- "Bernstein, Peter (2008) . "4–5". A Primer on Money, Banking and Gold (3rd ed.). Hoboken, NJ: Wiley. "ISBN "978-0-470-28758-3. "OCLC 233484849.
- "Currency". Investopedia.
- "Guide to the Financial Markets" (PDF). The Economist.
- Banaji, Jairus (2007). "Islam, the Mediterranean and the Rise of Capitalism". Historical Materialism. "Brill Publishers. 15 (1): 47–74. "doi:10.1163/156920607X171591. "ISSN 1465-4466. "OCLC 440360743. Retrieved August 28, 2010.
- "Lopez, Robert Sabatino; Raymond, Irving Woodworth; Constable, Olivia Remie (2001) . Medieval trade in the Mediterranean world: Illustrative documents. Records of Western civilization.; Records of civilization, sources and studies, no. 52. New York: "Columbia University Press. "ISBN "0-231-12357-4. "OCLC 466877309.
- Labib, Subhi Y. (March 1969). "Capitalism in Medieval Islam". The Journal of Economic History. Wilmington, DE: Economic History Association. 29 (1): 79–86. "ISSN 0022-0507. "JSTOR 2115499. "OCLC 478662641.
- "Triennial Central Bank Survey Foreign exchange turnover in April 2016" (PDF). Triennial Central Bank Survey. Basel, Switzerland: Bank for International Settlements. 11 December 2016. p. 7. Retrieved 22 March 2017.
- The total sum is 200% because each currency trade always involves a "currency pair.
- ● TED Video: Kemp-Robertson, Paul (June 2013). "Bitcoin. Sweat. Tide. Meet the future of branded currency". "TED (conference). ● Corresponding written article: "10 alternative currencies, from Bitcoin to BerkShares to sweat to laundry detergent". "TED (conference). July 25, 2013. Archived from the original on July 25, 2013.
- Hough, Jack. "The Currency That's Up 200,000 Percent". SmartMoney (The Wall Street Journal). Retrieved December 14, 2012.
- Turk, James; Rubino, John (2007) . The collapse of the dollar and how to profit from it: Make a fortune by investing in gold and other hard assets (Paperback ed.). New York: Doubleday. pp. 43 of 252. "ISBN "978-0-385-51224-4. "OCLC 192055959.
- Linton, Michael; Bober, Jordan (2012-11-07). "Opening Money". The Extraenvironmentalist (Interview). Interview with Seth Moser-Katz; Justin Ritchie. Retrieved 2016-12-29.
- "Opening Money" ("MP3). The Extraenvironmentalist (Podcast). Retrieved 2016-12-29.
- http://www.swift.com/about_swift/shownews?param_dcr=news.data/en/swift_com/2014/PR_RMB_Nov_Dec.xml RMB breaks into the top ten most-used currencies for payments
- http://www.swift.com/about_swift/shownews?param_dcr=news.data/en/swift_com/2014/PR_RMB_Jan.xml Chinese Renminbi Overtakes the Swiss Franc as a World Payments Currency
- http://www.swift.com/about_swift/shownews?param_dcr=news.data/en/swift_com/2014/PR_RMB_records_offshores.xml RMB reaches record levels of payments activity between offshore centres
- https://www.swift.com/insights/press-releases/rmb-adoption-between-china-and-japan-has-more-than-doubled-in-the-last-two-years RMB adoption between China and Japan has more than doubled in the last two years
- "CARICOM Single Market (CSM) ratified! – Caribbean leaders sign formal document". p. Kingston, Jamaica: "Jamaica Gleaner. January 31, 2006. "OCLC 50239830.
|""||"Wikidata has the property: currency (P38) (see uses)|