What is currency?

Alexander Smaznev
Alexander Smaznev
February 19, 2015
What is currency?

Of course, today there is no such person who would not know what a currency is.

A currency is a monetary unit that is a measure of the value of goods and services on the territory of a given state, and also acts as a means of payment when purchasing goods and settling for services rendered. In our country, the term "currency" is traditionally also called the banknotes of other states.

What could be the currency

In one country or another, it can be:

  • National. For Russia, the national currency is the ruble.
  • Foreign. For us, these are all other currencies, including the American dollar.
  • International. An example of such a currency is the euro.

If possible, exchange for another currency:

  • Freely convertible. This currency can be freely exchanged for another. It also carries out operations under international contracts. Such currencies include the dollar, euro, pound sterling, yen and about 20 more currencies.
  • Partially convertible currency. The modern Russian ruble is a partially convertible currency,as there are certain restrictions on settlements in rubles under international agreements.
  • Inconvertible (closed) currency. It can not be freely exchanged for other currencies. Examples: Soviet ruble, Lao kip.

By security:

  • Secured (for example, gold). Such currency can be exchanged for gold.
  • Unsecured. Neither the ruble nor the dollar is not provided with gold.

Physically, a currency can be:

  • Cash - in the form of banknotes or coins.
  • Non-cash - an account in the bank, from which you can make payment transactions.
  • Electronic - an account on a special Internet service. You can pay for goods or services from it if the payer accepts such currency.

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