Currency is a medium of exchange for goods and services. In short, it’s money, in the form of paper or coins, usually issued by a government and generally accepted at its face value as a method of payment.
Currency is the primary medium of exchange in the modern world, having long ago replaced bartering as a means of trading goods and services.
In the 21st century, a new form of currency has entered the vocabulary, the virtual currency. Virtual currencies such as bitcoins have no physical existence or government backing and are traded and stored in electronic form.
Understanding Currency
Currency in some form has been in use for at least 3,000 years. Money, usually in the form of coins, proved to be crucial to facilitating trade across continents.
KEY TAKEAWAYS
- Currency is a generally accepted form of payment, usually issued by a government and circulated within its jurisdiction.
- The value of any currency fluctuates constantly in relation to other currencies. The currency exchange market exists as a means of profiting from those fluctuations.
- Many countries accept the U.S. dollar for payment, while others peg their currency value directly to the U.S. dollar.
