Today, a person is completely dependent on money. Everyone is literally obsessed with how to increase their capital. As economists of the nineteenth and twentieth centuries used to say, the main goal of capitalism is to earn capital in order to increase its capital. Let's delve into the history of the appearance of money.
Money story
Money is a kind of equivalent for assessing and measuring the value of goods and services. Of course, the first money was far from what we used to see now. These were various items. In Ancient Russia, the role of money was played by salt, skins, honey and so on. In Australia, shells and pearls were used for this.
Initially, the role of money was played by coins. At first they were made of expensive metals such as gold and silver. But this did not last long, because why spend such expensive resources if they can be replaced with cheaper metals. Nowadays, such old money is worth a fortune.
The first paper money appeared in China in 910. Of course, they were far from being similar to paper banknotes familiar to us. The first paper notes began to be issued in the capital of Sweden in the second half of the 17th century. They appeared in Russia when Catherine the Second came to power in 1769.
What does the concept of currency mean?
The word "currency" comes from the Italian valuta and means a means of payment in the form of national, world or foreign money in cash and non-cash. Basically, each state has its own independent currency, which has a certain relation to world currencies to adjust its exchange rate.
Currency: concept and types
There are many signs for currency classifications. Let's talk about what a currency is, its concept and types. They are separated by such a feature as convertibility with respect to the foreign exchange market and other currencies. What does it mean? Convertibility is the possibility of exchanging one currency for another. Not all currencies in the world can be easily exchanged. Therefore, they are divided according to the degree of convertibility, which is determined by the IMF (World Monetary Fund).
- Hard currency (freely convertible currency) - this type of currency is not limited in any way by the state that issues it in exchange for other currencies. An example of such currencies is the American dollar and the British pound.
- ChKV (partially convertible currency) - this type of currency has certain restrictions on the exchange. These currencies include the Russian ruble, Ukrainian hryvnia and many others.
- The last type of currency in terms of convertibility is the non-convertible currency (NKV) - it exists and is a form of payment only in the country that issues it.
This division of currencies does not end there.
There is a division of currencies into types at the exchange rate:
- In relation to two currencies to each other.
- Current - at the rate of a cash transaction when settled within a couple of days.
- Floating - this rate is set at stock trading.
- The cross rate is also the ratio of two currencies, but compared to the third currency.
- Derivative Deal Rate is the rate for forward settlement.
The main types of monetary currencies are:
- National
- Worldwide.
- Foreign.
Currencies of different countries
Now we will begin the most important part of the article - the consideration of the types of national currencies. Of course, it is physically impossible to fit information about all of them in one article. But we can talk about the main types of currencies in the countries of the world. There are several currencies in the world that are combined into one group called "major currencies." These include: the American dollar, the euro, the Japanese yen, pounds sterling and Swiss francs.
As you can see, there are 3 more types of foreign currency here - these are the Canadian, Australian and New Zealand dollars. But among these 8 currencies, they are more likely to be of secondary importance. Other foreign currencies include the ruble, hryvnia, tenge, yuan, the emirate dirham and some others. Consider in more detail the main types of currency.
Dollar history
Even during the development of the New World, such a type of foreign currency as the dollar was introduced. Initially, it was understood as European thalers and Spanish pesos. As such, the dollar was not yet a currency. A little later, he began to look like silver coins.
Many people often ask why these banknotes are issued in green. The blame was the Civil War. The thing is that after the outbreak of the Civil War, huge sums of money were required. For comparison, this amount in equivalent to the national currency would have amounted to a total of 60 million rubles. The Treasury instructed to start printing this amount of money, the printing company first decided to calculate how much ink they have, and it was decided to use green because it was the most. In this way, the dollar began to be issued in green and remains so today.
American dollar
This currency is the main one in the USA and in many countries of the world. The dollar is one of the world's reserve currencies. As a type of currency, the dollar is quite young, but managed to survive both sharp ups and rapid falls. Until the middle of the 20th century, the dollar had no serious influence on the world economy. The Second World War made it possible for the United States of America to make a powerful start and bring the country, and with it the dollar to the world stage. Up to this point, the country's affairs were far from perfect.
In the XVIII-XIX century, the government tried to link the dollar with gold, but since the United States did not have a serious gold reserve, they could only keep the exchange rate of gold against gold by lowering it. Even during the Great Depression, America tried to keep the dollar's attachment to gold, but the rate continued to fall. Now, in dollar terms, more than 80% of all transactions in the world are carried out. What kind of currency is the most common in the world? Of course, the dollar literally captured Australia, Belize, Canada, New Zealand, Namibia, Singapore, East Timor, Puerto Rico, Panama, Palau, Brunei, the British and Bahamas, Bermuda, Marshall Islands, Solomon Islands, part of African countries and Jamaica, as well as a number of other countries that made it the main national currency. At the moment, the dollar is in the top 5 at the world exchange rate and is stably kept in this list. There are, as already mentioned, several varieties of the dollar as a currency.
The history of the origin of the euro
In connection with the creation of the European Union, the member countries had to switch to a single currency called the "euro". The union itself was created in 1993, but the new currency appeared in circulation only from the 1st of 1999. Euro is one of the youngest currencies. Currently in circulation is more than 900 billion euros. This is a huge amount that has overtaken the number of dollars in world circulation.
About the currency itself
Euro and dollar are the most important world currencies, although the euro is much more expensive than the dollar, but inferior to it in the lead. The euro is also the official currency of 19 countries in the eurozone and another 9 states. But what is remarkable, only these 19 countries can influence the exchange rate and the development of the currency. Only EU members can send representatives to the European Central Bank. Convertibility Euro is fully open.
It is worth mentioning the Maastricht criteria. The fact is that in order to gain access to the euro, it is necessary to meet the following criteria: low inflation, public debt must be below 60% of GDP. Inflation cannot be higher than 1.5% compared with 3 countries with the most reasonable and stable prices. Only by meeting these criteria can you access the currency. Many countries received this access only after 2010. These were Latvia, Lithuania and several other countries. Some European countries still left their own currency above the euro, such as the United Kingdom.
Japanese Yen History
The yen is a pretty old currency. The first minted coin dates from 1869. From this moment begins the history of Japanese money. The yen was the main currency of the bloc during World War II. Often the Japanese government tied the currency to gold, but then canceled it depending on the economic situation in the country. Japan even entered the sterling block. 1 yen equaled 14 British pence. From the list of interesting facts, it can be noted that in 1927 there was a crisis in Japan, investors were afraid for their savings and massively removed them from the accounts. There was a shortage of banknotes, and the Central Bank ordered the printing of banknotes in nominal value of 200 yen, the reverse side of which was completely clean.
British pounds: history
Pound Sterling is the national currency in the United Kingdom of Great Britain and Northern Ireland. Pound consists of 100 pence. The rate of this currency is higher than the euro. Until recently, Britain was a member of the European Union, but now there is a process of withdrawal from the union. The pound, like the yen, is the old currency. The first information about him dates back to the XII century. In 2013, it was announced that the Bank of England may begin issuing polymer banknotes next year. In September 2016, the Bank of England issued a 5-pound G-series polymer banknote. On the back of the bill is a portrait of Sir Winston Churchill. The Bank of England plans not later than 2020 to switch to 10- and 20-pound bills, and completely withdraw bills with a face value of less than 10 pounds. Interestingly, the United Kingdom has always used pounds, although it was a member of the European Union. The UK has always set its own currency higher.
Swiss franc: a little about him
Swiss Franc is the national currency in Switzerland and Liechtenstein. It is noteworthy that in Europe there is only one currency left, which is still called the franc. Most banknotes depict artists, which is rather unusual, because mostly money depicts presidents, rulers or outstanding historical heroes. Like previous currencies, it is used as a reserve due to its stability. Refers to the type of floating currencies, that is, the currency market has an impact on the franc. Each banknote looks very beautiful, like a separate work of art.
A bit about the Russian currency
What is the type of currency in Russia? Of course, in our state they pay in rubles. The ruble is a rather weak currency, unstable. It is not included in the top 10 world currencies at the exchange rate, it is not a reserve currency. And in recent years, its course is generally difficult to predict. Racing in relation to the American dollar from 30 rubles to 70-80 greatly undermines confidence in it.
The most expensive bill is a banknote of 5000 rubles. In 2017, two new banknotes of 200 and 2,000 rubles were put into use. As a type of currency, the ruble is partially convertible, that is, it cannot be exchanged for absolutely any currency. By the way, it is the national currency in Abkhazia, South Ossetia and Russia. The issuing countries of the ruble, that is, those that issued it, are all countries that are members of the Soviet Union, but only three of the above states remain. By the way, the ruble has less than 0.5% of the interbank turnover. For comparison, the dollar and the euro have 40% and 30% respectively.
Conclusion
In the world there are a huge number of types of currencies. Blue and green, red and blue, with portraits of state leaders and world famous artists - they can be completely different. Currencies are of several types, the main criteria for their division is the scale of distribution and convertibility. The leaders in the world are 5 currencies: dollars, pounds, yen, francs, euros. The absolute leaders among them are the euro and the dollar. The Russian currency, unfortunately, is not included in this five. There are also 3 more dollar currencies in the main list. This is the Australian, New Zealand and Canadian dollars, but in reality they are secondary.