Currency

A currency^[a] is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins.^[1][2] A more general definition is that a currency is a system of money in common use within a specific environment over time, especially for people in a nation state.^[3] Under this definition, the Pound sterling (£), euro (€), Japanese yen (¥), and U.S. dollars (US$) are examples of (government-issued) fiat currencies. Currencies may act as stores of value and be traded between nations in foreign exchange markets, which determine the relative values of the different currencies.^[4] Currencies in this sense are either chosen by users or decreed by governments, and each type has limited boundaries of acceptance; i.e., legal tender laws may require a particular unit of account for payments to government agencies.

Other definitions of the term currency appear in the respective synonymous articles: banknote, coin, and money. This article uses the definition which focuses on the currency systems of countries (fiat currencies).

One can classify currencies into three monetary systems: fiat money, commodity money, and representative money, depending on what guarantees a currency's value (the economy at large vs. the government's precious metal reserves). Some currencies function as legal tender in certain jurisdictions, or for specific purposes, such as payment to a government (taxes), or government agencies (fees, fines). Others simply get traded for their economic value.

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