What is currency and how does it work?

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.

What are the different types of currency?

1 Paper Money. American paper currency come in seven denominations: $1, $2, $5, $10, $20, $50, and $100. ... 2 Coins. The United States issues several denominations, with the most common being: 1¢, 5¢, 10¢, 25¢, 50¢, and $1. 3 Mutilated Money. If you have paper money that is extremely damaged, you can redeem it with the BEP. ...

What is a fully convertible currency?

Individuals, like international tourists, who want to trade hard currency usually do so at an exchange window or at a bank without any restriction or artificially imposed fixed value. These currencies are considered fully convertible. Partially convertible currencies are currencies that a central bank controls.