Currency

A currency (from Middle English: curraunt, "in circulation", from Latin: currens, -entis) in the most specific use of the word refers to money in any form when in actual use or circulation, as a medium of exchange, especially circulating paper money. 

some generic currency symbols including dollars, pounds, euros. image: wikipedia

How the word currency is used

This use is synonymous with banknotes, or (sometimes) with banknotes plus coins, meaning the physical tokens used for money by a government.

A much more general use of the word currency is anything that is used in any circumstances, as a medium of exchange. In this use, "currency" is a synonym for the concept of money. 

A definition of intermediate generality is that a currency is a system of money (monetary units) in common use, especially in a nation.  Under this definition, British pounds, U.S. dollars, and European euros are different types of currency, or currencies. 

Currencies need not be physical objects, but as stores of value are subject to trading between nations in foreign exchange markets, which determine the relative values of the different currencies. 


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A generic bitcoin symbol for the digital crypto currency. image: bitcoin.it

 Currencies in the sense used by foreign exchange markets, are defined by governments, and each type has limited boundaries of acceptance.

Types of currencies 

Currencies can be classified into two monetary systems:

  •  fiat money; 
    • defined by the government overalls economic interpretation of a countery
  •  commodity money;
    •  defined by a physical reserve of a commodity like gold.


Currencies as payment for debt

Some currencies are legal tender in certain jurisdictions, which means they cannot be refused as payment for debt. Others are simply traded for their economic value. Digital currency arose with the popularity of computers and the Internet.

source: adapted from: http://en.wikipedia.org/w/index.php?title=Currency&oldid=610690047