Money and Finance: World Currencies

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World Currencies

All around the world different countries use different types of money. Many countries have their own money. This money is backed by the government and is usually called "legal tender." Legal tender is money that must be accepted as a form of payment in that country.

Major World Currencies

Although there are many different types of money throughout the world, there are some major world currencies that are accepted or used in several different regions and countries. We describe some of these below:

British Pound Sterling- The British pound is the official currency of the United Kingdom. It is currently the fourth most traded currency in the world. Prior to 1944, it was considered the world reference for currency.
U.S. Dollar - The U.S. dollar is the official currency of the United States. It is the most used currency in international transactions. There are other countries (i.e. Ecuador and Panama) who use the U.S. dollar as their official currency.
European Euro - The Euro is the official currency of the European Union. Many of the countries in the European Union use the Euro as their official currency (not all of them do such as Denmark and the United Kingdom). The Euro passed the U.S. dollar in total cash in circulation in 2006.
Japanese Yen - The Japanese Yen is the official currency of Japan. It is the third most traded currency in the world.

Exchange Rates

When you go to another country, you will usually want to get some cash of the local money. You can do this by exchanging your money for some of that country's money. This is done by using exchange rates. For example, if you were in Europe and wanted to trade U.S. dollars for 100 Euros. If the exchange rate was 1 Euro equals 1.3 U.S. dollars then you would have to give them 130 U.S. dollars to get 100 Euro.

You can look on the internet to see the latest exchange rates between different world currencies. However, exchange rates will vary slightly depending on where you go. Different banks or institutions may have different fees and rates for making the exchange.

The Gold Standard

How do you know money is really worth anything? Well, countries used to hold gold that represented all the money they had printed. Each coin or bill they printed was backed by gold in a big vault somewhere. Today, countries no longer do this. They usually do have some gold called "gold reserves" that help to back the money, but it's really the economy and government who are backing the value of the money.

List of World Currencies

Here is a list of some of the currencies used throughout the world.

Australia - dollar
Brazil - real
Canada - dollar
Chile - peso
China - yuan or renminbi
Czech Republic - koruna
Denmark - krone
France - euro
Germany - euro
Greece - euro
Hong Kong - dollar
Hungary - forint
India - rupee
Indonesia - rupiah
Israel - new shekel
Italy - euro
Japan - Yen
Malaysia - ringgit
Mexico - peso
Netherlands - euro
New Zealand - dollar
Norway - krone
Pakistan - rupee
Philippines - peso
Poland - zloty
Russia - ruble
Saudi Arabia - riyal
Singapore - dollar
South Africa - rand
South Korea - won
Spain - euro
Sweden - krona
Switzerland - franc
Taiwan - dollar
Turkey - lira
United Kingdom - pound sterling
United States - dollar

Fun Facts About World Money

Some countries like Canada and Australia are now using plastic, rather than paper, to make their bills.
The portrait of Queen Elizabeth II has been on the money of 33 different countries.
The first living person to be featured on a coin was Julius Caesar in 44 B.C.
The first euro coins and bills were introduced in 2002.
Stores in some countries may accept multiple currencies. For example, you may find a store in the tourist section of Denmark that accepts both Danish krone and euro.

Learn More about Money and Finance:

Personal Finance

Budgeting
Filling out a Check
Managing a Checkbook
How to Save
Credit Cards
How a Mortgage Works
Investing
How Interest Works
Insurance Basics
Identity Theft

About Money

History of Money
How Coins are Made
How Paper Money is Made
Counterfeit Money
United States Currency
World Currencies

Money Math

Counting Money
Making Change
Basic Money Math
Money Word Problems: Addition and Subtraction
Money Word Problems: Multiplication and Addition
Money Word Problems: Interest and Percent

Economics

Economics
How Banks Work
How the Stock Market Works
Supply and Demand
Supply and Demand Examples
Economic Cycle
Capitalism
Communism
Adam Smith
How Taxes Work
Glossary and Terms

Note: This information is not to be used for individual legal, tax, or investment advice. You should always contact a professional financial or tax advisor before making financial decisions.

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