United States penny, obverse, 2002. Under this definition, US dollars, British pounds, Australian dollars, and European euros are examples of currency. Currencies in this sense are defined by governments, and each type has limited boundaries peercoin vs bitcoin stock acceptance.

The latter definition, pertaining to the currency systems of nations, is the topic of this article. Others are simply traded for their economic value. Cowry shells being used as money by an Arab trader. In this first stage of currency, metals were used as symbols to represent value stored in the form of commodities.

Trade could only reach as far as the credibility of that military. 15th century onwards to sell slaves. These factors led to the metal itself being the store of value: first silver, then both silver and gold, and at one point also bronze. Now we have copper coins and other non-precious metals as coins. Metals were mined, weighed, and stamped into coins.

This was to assure the individual taking the coin that he was getting a certain known weight of precious metal. Most major economies using coinage had several tiers of coins, using a mix of copper, silver and gold. However, the rarity of gold consistently made it more valuable than silver, and likewise silver was consistently worth more than copper. These notes were valid for temporary use in a small regional territory. The Song government granted several shops the right to issue banknotes, and in the early 12th century the government finally took over these shops to produce state-issued currency.

Yet the banknotes issued were still only locally and temporarily valid: it was not until the mid 13th century that a standard and uniform government issue of paper money became an acceptable nationwide currency. 11th century were the impetus for the mass production of paper money in premodern China. As Sweden was rich in copper, its low value necessitated extraordinarily big coins, often weighing several kilograms. But there were also disadvantages.

First, since a note has no intrinsic value, there was nothing to stop issuing authorities from printing more notes than they had specie to back them with. Thus paper money would often lead to an inflationary bubble, which could collapse if people began demanding hard money, causing the demand for paper notes to fall to zero. For these reasons, paper currency was held in suspicion and hostility in Europe and America. It was also addictive, since the speculative profits of trade and capital creation were quite large. 19th century, with the increases both in supply of these metals, particularly silver, and in trade. They could also set the terms at which they would redeem notes for specie, by limiting the amount of purchase, or the minimum amount that could be redeemed. This did not happen all around the world at the same time, but occurred sporadically, generally in times of war or financial crisis, beginning in the early part of the 20th century and continuing across the world until the late 20th century, when the regime of floating fiat currencies came into force.

1980s that went into circulation on the nation’s bicentenary in 1988. Name of currency units by country. Strength of currencies relative to USD as of April 2016. The institution that has control of monetary policy is referred to as the monetary authority.