For those to whom such matters are vital, one of the best places to start educating yourself is by understanding exactly what currency is and how it is defined around the world. Knowing the most popular forms of currency can be helpful as well, especially when you are considering living abroad on a permanent or semi-permanent basis.
1. The US Dollar
It may come as a surprise to some that even with the current recession and economic downturn the United States has suffered; the US Dollar is still the most popular form of currency in the world today. This is most likely explained by the relatively simple units that the US dollar (abbreviated USD) is broken up into ($0.01 x 100 = $1.00).
The Basics:
-The smallest unit of US currency is the penny, which is worth 1/100 of a dollar.
-The most frequently used denominations are $1, $5, $10, $20, $50 and $100 paper bills.
-The US dollar is used as the primary currency in nearly twenty countries around the world – including (but not limited to) the USA, US Virgin Islands, Guam, Ecuador, El Salvador, Puerto Rico, Panama and American Samoa.
-US currency is monitored by a central bank known as the Federal Reserve. Paper money is traditionally backed by gold bullion – the price of which has skyrocketed since the onset of the recession.
2. The Euro
The second most popular currency currently in use is the European Euro. Admittedly, the Euro is also one of the newest forms of currency, but its ease of exchange and widespread acceptance rate makes it second only to the US dollar in terms of convenience.
The Basics:
-The Euro is issued in denominations very similar to that of the USD; however, the coinage is slightly different – including both commonly used twenty- and fifty-cent pieces.
-The Euro is the second most traded currency in the Forex market (behind the USD).
-The Euro is accepted over almost all of Europe including Italy, France, Ireland, Germany, Greece, Austria and the Vatican City, as well as many of the European territories.
-The Euro is issued by the European Central Bank.
3. The British Pound
As one of the oldest forms of currency still in use today, the British pound comes in as the third most popular form of currency in the world. The staying power of the pound is well illustrated by the fact that although the United Kingdom was accepted as a member of the European Union, they chose not to adopt the Euro over their traditional currency.
The Basics:
-The British equivalent of the US penny is called the “pence.” 1 pence x 100 = £1
-The pound is also commonly referred to as sterling, quid or nicker.
-One of the rarest denominations of British currency used is the £100 paper note.
-The British pound is backed by the Bank of England.
Knowing where to start when it comes to handle the exchange of money internationally can be an intimidating prospect. While this has only been a brief overview of some of the most common forms of currency, it is advisable to educate yourself thoroughly on the accepted forms of currency for any location you intend to relocate to or visit. Understanding the background and jargon associated with local money can save you a great deal of hassle and expense.
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