Accounting terms

Dictionary of all accounting terms

What is Currency?

Currency is the accepted form of money which is issued by the government and includes paper notes and coins.

Currency is, more specifically, generally accepted throughout the world as a form of money, which each government issues and circulates in the economy. Most nations have currency in paper notes and coins, although some countries' currency can be quite inflated, making coins essentially valueless. Each country has its own distinct currency with a few notable exceptions.

For example, the United Kingdom has its pound, South Africa has its rand, Japan has the yen, and so on. The European Union is an exception, however, as the member states all use the euro throughout the eurozone. The euros are all similar, although the coins will display the name and some feature of the country.

Other countries, even if they have their own currencies, accept the currencies of other nations. For example, Panama and El Salvador allow its citizens to use the US dollar to buy and sell goods and services.

Emerging currencies

There are other currencies in the digital age currently being used and increasing in popularity. They include various cryptocurrencies such as the dogecoin, although the most popular is the bitcoin. These currencies are decentralized, meaning no nation issues them, which is the reason for their popularity. They help protect the anonymity of the purchases and supplier.

Technically, there are other digital currencies such as credit card reward points or points and 'coins' won inside are game only provide value for the currency holder in those systems and not on a larger scale.

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