United States, Dollar
The United States dollar (sign: $; code: USD;
referred to as the U.S. dollar
, American dollar or US Dollar) is the official currency of the United States and its overseas territories. It is a Federal Reserve Note and consists of 100 smaller cent units
The US Dollar is the currency of United States. the most popular United States Dollar exchange rate is the USD to EUR rate.
The U.S. dollar is fiat money. It is the currency most used in international transactions and is the world’s most dominant currency.Several countries use it as their official currency.Besides the United States, it is also used as the sole currency in two British Overseas Territories in the Caribbean: the British Virgin Islands and the Turks and Caicos islands.
US Dollar History
The US central bank is called the Federal Reserve Bank
(commonly referred to as “The Fed
“). The USD is the most traded currency in the forex market and can be paired with all other major currencies. Common names for the USD include the buck, greenback, green, dough, bones, dead presidents, scrillas, and paper
Importance of the US Dollar
The US Dollar is the most commonly converted currency in the world and is used as a benchmark in the Forex market. As the dominant global reserve currency, it is held by nearly every central bank in the world. The Dollar is used as the standard currency in the commodity market and therefore has a direct impact on commodity prices.
Introduction of the US Dollar
In 1785, the Dollar was officially adopted as the money unit of the United States. The Coinage Act of 1792 created the first U.S. Mint and established the federal monetary system, as well as set denominations for coins specified by their value in gold, silver, and copper. In 1861, the U.S. Treasury issued non-interest-bearing Demand Bills and the very first $10 Demand Bills, featuring Abraham Lincoln, went into circulation. These bills quickly earned the nickname ‘Greenbacks’ because of their color. In 1863, a national banking system was established and guidelines for national banks were created. These banks were authorized to issue national currency secured by the purchase of US bonds. In 1914, the first $10 Federal Reserve notes were issued. In 1914, the first $10 Federal Reserve notes were issued.
Dollarization of the USD
Due to its international acceptance, some countries like Panama and Ecuador use the USD as an official legal tender, a practice known as dollarization. For other countries the Dollar is an accepted alternative form of payment, though not an official currency for the country.
Silver and Gold Standard in the US
The United States attempted to make a bimetallic standard, starting by adopting a silver standard based on the Spanish Milled Dollar in 1785. However, silver coins soon left circulation becoming completely suspended by 1806. By this time, most countries had already begun to standardize transactions by adopting the gold standard, meaning that any paper money could be redeemed by the government for its value in gold. The Bretton-Woods system was adopted by most countries to set the exchange rates for all currencies in terms of gold. Since the United States held most of the world’s gold, many countries simply pegged the value of their currency to the Dollar. In 1973, the US finally decoupled the value of the Dollar from gold.