“Money makes the world go round.”
A famous saying indeed. Nowadays, money always accompanies our daily lives. From waking up in the morning, buying coffee and pancakes in our favorite fast food stores, to commuting in public transportation, to our offices doing business transactions with banks and clients, and back to our homes paying our monthly apartment rents, electric, water, and internet bills. Money can buy us luxuries, such as cars, yacht, private jets, precious jewels, and the pleasure of traveling around the world. Money definitely shapes our world. But I hope money will not control our lives.
Money indeed helps in the development of mankind. Money is used to sustain the education of young students. Money helps in taking care of the poor, the sick, and the marginalized. Money helps in building nations, by bridging people thru road and transportation, by connecting people via telecommunications and the internet, and by industrializing the country by building income-generating businesses and economics.
However, money can also be the source of corruption, wars, and disputes. Throughout the whole world history, the greed for money, and the power that come with it has been the source of disputes between different countries.
Knowing the very importance of money in our life, now we ask, “What is currency?” In a general sense, currency is the system of money, in any form, used as a medium of exchange in a particular country. As per the real definition of currency in the dictionary, currency is the general and accepted form of money whether it be coins, paper, notes or stocks and notes, which is issued by a government and circulated within a specific place or economy. This is also used as a medium of exchange for goods and services.
There are different currencies around the world. The most frequently used currencies in 2015 are still the United States Dollar. The other frequently used foreign currencies, in order of descending rank as used in the World Market, include Euro, Pound sterling, Japanese yen, Swiss franc, Canadian dollar, Chinese yuan, Australian dollar, Hong Kong dollar, Thailand baht, Swedish krona, Singapore dollar, Norwegian krone, Polish zloty, and Danish krone.
These currencies serve as stores of value, which are exchanged between countries thru the foreign exchange markets. It is this foreign exchange markets which determine the relative values of each of the different types of currencies.
In the most historical sense, money began to be of use since 2000 BC in ancient Mesopotamia and ancient Egypt. Money was used in barter and trade, representing a certain value when exchanged with commodities such as grains, poultry, and agricultural products. Money at that time was in the form of metal coins, copper ingots, beads, ivory, gold, and silvers.
Coins became popular means of exchange in ancient India and medieval Europe. Non-precious metals such as coppers, and precious metals, such as silvers and golds, were mined, weighed, shaped, and stamped into coins. The nonprecious metals were used for daily purchases while the silvers and golds which are of greater value, were used in larger and more important business transactions and state activities.
Because it is physically cumbersome to always bring metal coins as a means of exchange in business transactions among traders and merchants, the use of paper money and bank notes were invented in China during the Tang Dynasty in 600 AD. However, their printed paper money were only locally valid, and it was not until the 1300 AD where the government issued paper money became the nationwide currency. The means of storage of these monetary units also brought about the birth of modern banking.
Since then several modifications and innovations in the exchange of currency has evolved, with the use of cheques, credits, and trusts. The banking introduced savings accounts, transactional accounts, loans, deposits, exchange rate, transfer of credit, etc.
Nowadays, the central banks of each country regulate the production and circulation of its currency. The different currencies can be exchanged at a certain exchange rate, which is determined by the foreign exchange market. Governments can also intervene with the market to balance the supply and demand of their currency, and prevent inflation.
In terms of travel, currency is a very important thing to know and take note. Remember that for every country and every place that you visit, there will be different currencies that apply that you will be using, and you should be checking this in advance in order to prevent you from having the hassle of not being able to transact. Though there are economies or places where you can bring in a specific currency and people will still transact with you, it is very rare to have that situation. One classic example of a place where you do not have to exchange your US dollars when purchasing things is in Hong Kong. For some reason, since Hong Kong has come to be known as a shopping and bargain capital in southeast Asia, many foreigners come in here, and most of them bring the universal currency which is the US dollars, so most merchants actually do accept the currency itself and they automatically convert the items into US dollar prices so that makes it easier for foreigners and tourists to actually make deals and transactions. If you will ask the people in Hong Kong what is currency? They will know that it is a part of their daily system and is something that they use to buy and sell things fast and easy.
What I am talking about is specifically found in Hong Kong. Other similar places might be in Jakarta, or Bangkok, Indonesia, where it is said to be one of the top tourist destinations in terms of cities in the last few years, and it has become a shopping haven also, which makes currency an important part of its system too. But still most of the currency used here is Thai Baht, its national currency, and dollars still take a back seat in terms of usage. As you can see, the importance of the currency can be seen for travelers and tourists as this is their means to transact with the places and persons they are visiting.
Here in the US, it is no problem since no matter where you go as long as it is in the United States within its 50 states, there is no difference in the currency used. Even as far as Hawaii, as long as you are within the US territories, it is dollars that is predominant and used for every sale, transaction, and exchange. You can easily say that US dollar is the most general currency being used as a sign of trade all over the world today. Many countries rely on US dollars for its economic conversions, since stock trading are dictated by the price of the US dollar, even in oil and many other trade items. It is the dollar price of these things that will be used in pricings and listings.
Of course, it would be a different story if you are in Europe these days, where the Euro, or the general currency for that continent is being used. Euro is a mixture of currencies in that region, and it is 19 of the 28 member states that use it. Though some European countries retained their own currency, most of them converted to the Euro because it is easier to get to different European neighboring countries and transact using just one currency. But one big advantage of the Euro is really seen when it comes to traveling since Europe is interconnected by trains and buses which can travel easily from one location to another and you will be surprised that your train has already crossed countries easily, so that means that your money will not be needed to be exchanged at each place you visit.
It really is important to know your currency wherever you are as it is in a way similar to language. It speaks volumes wherever you are, and you cannot survive in any place if you do not adapt to the currency they use. So if you are planning to go on vacation, plan ahead. Exchange your money into the exact currency being used in that place in advance, and remember, also in foreign exchange, you should know when the exchange point is higher so that your money will be of bigger value at any given time frame. If the exchange rate, for example, is 43 pesos to 1 US dollar if you are visiting the Philippines for example, better watch out first because in just one day, that can change from 43 to 45 pesos so that means your dollar value will be much bigger at certain times, and that is when you exchange it. It is all a matter of timing too when you go for that exchange.
So what is currency again? It is simply money and how you transact with other places and do buy and sell and trading easily with these different places and countries.