CURRENCY

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What Is Currency?

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, virtual currency. Virtual currencies such as bitcoins have no physical existence or government backing and are traded and stored in electronic form.

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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.