Currency

Currency is a system of money in general use in a particular country. The study of currencies is known as numismatics.

Definition

A currency in the most specific sense is money in any form when in use or circulation as a medium of exchange, especially circulating banknotes and coins. A more general definition is that a currency is a system of money (monetary units) in common use, especially for people in a nation.

Types of Currency

There are two types of currency: fiat currency and commodity currency.

Fiat currency is a currency established as money, often by government regulation, but that has no intrinsic value. Fiat money does not have use value, and has value only because a government maintains its value, or because parties engaging in exchange agree on its value.

Commodity currency is a name given to forms of money that are not representative money and are not fiat. In this system, objects or commodities have value, and therefore, they have monetary value.

Currency Exchange

Currency exchange involves the trading of one currency for another, typically in the foreign exchange market. This is done for various reasons, usually for commerce, trading, or tourism.

Currency in Economics

In economics, currency refers to physical objects generally accepted as a medium of exchange. These are usually the coins and banknotes of a particular government, which comprise the physical aspects of a nation's money supply.

See Also

• Money
• Banknote
• Coin
• Economics
• Foreign exchange market

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  A print from 1845 shows cowry shells being used as money by an Arab trader
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  Jiao zi
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  South East Asia Exchange Rates