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The United States dollar (
symbol A symbol is a mark, sign, or word that indicates, signifies, or is understood as representing an idea, object, or relationship. Symbols allow people to go beyond what is known or seen by creating linkages between otherwise very different con ...
: $;
code In communications and information processing, code is a system of rules to convert information—such as a letter, word, sound, image, or gesture—into another form, sometimes shortened or secret, for communication through a communica ...
: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the official
currency A currency, "in circulation", from la, currens, -entis, literally meaning "running" or "traversing" is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general ...
of the
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territor ...
and several other countries. The Coinage Act of 1792 introduced the U.S. dollar at par with the Spanish silver dollar, divided it into 100 cents, and authorized the minting of coins denominated in dollars and cents. U.S. banknotes are issued in the form of
Federal Reserve Note Federal Reserve Notes, also United States banknotes, are the currently issued banknotes of the United States dollar. The United States Bureau of Engraving and Printing produces the notes under the authority of the Federal Reserve Act of 1 ...
s, popularly called greenbacks due to their predominantly green color. The monetary policy of the United States is conducted by the
Federal Reserve System The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after ...
, which acts as the nation's
central bank A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union, and oversees their commercial banking system. In contrast to a commercial bank, a central b ...
. The U.S. dollar was originally defined under a bimetallic standard of (0.7735 troy ounces) fine silver or, from 1837, fine gold, or $20.67 per
troy ounce Troy weight is a system of units of mass that originated in 15th-century England, and is primarily used in the precious metals industry. The troy weight units are the grain, the pennyweight (24 grains), the troy ounce (20 pennyweights), an ...
. The
Gold Standard Act The Gold Standard Act was an Act of the United States Congress, signed by President William McKinley and effective on March 14, 1900, defining the United States dollar by gold weight and requiring the United States Treasury to redeem, on demand ...
of 1900 linked the dollar solely to gold. From 1934, its equivalence to gold was revised to $35 per
troy ounce Troy weight is a system of units of mass that originated in 15th-century England, and is primarily used in the precious metals industry. The troy weight units are the grain, the pennyweight (24 grains), the troy ounce (20 pennyweights), an ...
. Since 1971, all links to gold have been repealed. The U.S. dollar became an important international
reserve currency A reserve currency (or anchor currency) is a foreign currency that is held in significant quantities by central banks or other monetary authorities as part of their foreign exchange reserves. The reserve currency can be used in international t ...
after the
First World War World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fighti ...
, and displaced the
pound sterling Sterling (abbreviation: stg; Other spelling styles, such as STG and Stg, are also seen. ISO code: GBP) is the currency of the United Kingdom and nine of its associated territories. The pound ( sign: £) is the main unit of sterling, and ...
as the world's primary reserve currency by the
Bretton Woods Agreement The Bretton Woods system of monetary management established the rules for commercial and financial relations among the United States, Canada, Western European countries, Australia, and Japan after the 1944 Bretton Woods Agreement. The Bretto ...
towards the end of the
Second World War World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposi ...
. The dollar is the most widely used currency in international transactions, and a free-floating currency. It is also the official currency in several countries and the ''de facto'' currency in many others, with Federal Reserve Notes (and, in a few cases, U.S. coins) used in circulation. As of February 10, 2021, currency in circulation amounted to , of which is in Federal Reserve Notes (the remaining is in the form of
coins A coin is a small, flat (usually depending on the country or value), round piece of metal or plastic used primarily as a medium of exchange or legal tender. They are standardized in weight, and produced in large quantities at a mint in order ...
and older-style United States Notes).


Overview


In the Constitution

Article I, Section 8 of the U.S. Constitution provides that
Congress A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of ...
has the power " coin money." Laws implementing this power are currently codified in Title 31 of the U.S. Code, under Section 5112, which prescribes the forms in which the United States dollars should be issued.''Denominations, specifications, and design of coins''. . These coins are both designated in the section as "
legal tender Legal tender is a form of money that courts of law are required to recognize as satisfactory payment for any monetary debt. Each jurisdiction determines what is legal tender, but essentially it is anything which when offered ("tendered") in p ...
" in payment of debts. The
Sacagawea dollar The Sacagawea dollar (also known as the "golden dollar") is a United States dollar coin introduced in 2000, although not minted for general circulation between 2002 to 2008 and again from 2012 onward because of its general unpopularity with th ...
is one example of the
copper alloy Copper alloys are metal alloys that have copper as their principal component. They have high resistance against corrosion. The best known traditional types are bronze, where tin is a significant addition, and brass, using zinc instead. Both of th ...
dollar, in contrast to the American Silver Eagle which is pure
silver Silver is a chemical element with the symbol Ag (from the Latin ', derived from the Proto-Indo-European ''h₂erǵ'': "shiny" or "white") and atomic number 47. A soft, white, lustrous transition metal, it exhibits the highest electrical ...
. Section 5112 also provides for the minting and issuance of other coins, which have values ranging from one cent ( U.S. Penny) to 100 dollars. These other coins are more fully described in
Coins of the United States dollar Coins of the United States dollar (aside from those of the earlier Continental currency) were first minted in 1792. New coins have been produced annually and they make up a valuable aspect of the United States currency system. Today, circulating ...
. Article I, Section 9 of the Constitution provides that "a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time," which is further specified by Section 331 of Title 31 of the U.S. Code. The sums of money reported in the "Statements" are currently expressed in U.S. dollars, thus the U.S. dollar may be described as the
unit of account In economics, unit of account is one of the money functions. A unit of account is a standard numerical monetary unit of measurement of the market value of goods, services, and other transactions. Also known as a "measure" or "standard" of rela ...
of the United States. "Dollar" is one of the first words of Section 9, in which the term refers to the Spanish milled dollar, or the coin worth eight
Spanish real The ''real'' (English: /ɹeɪˈɑl/ Spanish: /reˈal/) (meaning: "royal", plural: ''reales'') was a unit of currency in Spain for several centuries after the mid-14th century. It underwent several changes in value relative to other units throu ...
es.


The Coinage Act

In 1792, the
U.S. Congress The United States Congress is the legislature of the federal government of the United States. It is bicameral, composed of a lower body, the House of Representatives, and an upper body, the Senate. It meets in the U.S. Capitol in Washi ...
passed the Coinage Act, of which Section 9 authorized the production of various coins, including:
U.S. Congress The United States Congress is the legislature of the federal government of the United States. It is bicameral, composed of a lower body, the House of Representatives, and an upper body, the Senate. It meets in the U.S. Capitol in Washi ...
. 1792.
Coinage Act of 1792
'. 2nd Congress, 1st Session. Sec. 9, ch. 16. Retrieved June 6, 2020.
Section 20 of the Act designates the United States dollar as the unit of currency of the United States:


Decimal units

Unlike the Spanish milled dollar, the
Continental Congress The Continental Congress was a series of legislative bodies, with some executive function, for thirteen of Britain's colonies in North America, and the newly declared United States just before, during, and after the American Revolutionary War. ...
and the Coinage Act prescribed a decimal system of units to go with the unit dollar, as follows: the mill, or one-thousandth of a dollar; the cent, or one-hundredth of a dollar; the dime, or one-tenth of a dollar; and the eagle, or ten dollars. The current relevance of these units: * Only the cent (¢) is used as everyday division of the dollar. * The dime is used solely as the name of the
coin A coin is a small, flat (usually depending on the country or value), round piece of metal or plastic used primarily as a medium of exchange or legal tender. They are standardized in weight, and produced in large quantities at a mint in order ...
with the value of 10 cents. * The mill (₥) is relatively unknown, but before the mid-20th century was familiarly used in matters of sales taxes, as well as gasoline prices, which are usually in the form of $ΧΧ.ΧΧ9 per
gallon The gallon is a unit of volume in imperial units and United States customary units. Three different versions are in current use: *the imperial gallon (imp gal), defined as , which is or was used in the United Kingdom, Ireland, Canada, Austral ...
(e.g., $3.599, commonly written as $). * The eagle is also largely unknown to the general public. This term was used in the ''Coinage Act of 1792'' for the denomination of ten dollars, and subsequently was used in naming gold coins. The Spanish peso or dollar was historically divided into eight reales (colloquially, ''bits'') – hence ''pieces of eight''. Americans also learned counting in non-decimal ''bits'' of cents before 1857 when Mexican ''bits'' were more frequently encountered than American cents; in fact this practice survived in
New York Stock Exchange The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its liste ...
quotations until 2001. In 1854,
Secretary of the Treasury The United States secretary of the treasury is the head of the United States Department of the Treasury, and is the chief financial officer of the federal government of the United States. The secretary of the treasury serves as the principal ...
James Guthrie proposed creating $100, $50, and $25 gold coins, to be referred to as a '' union'', '' half union'', and ''quarter union'', respectively, thus implying a denomination of 1 Union = $100. However, no such coins were ever struck, and only patterns for the $50 half union exist. When currently issued in circulating form, denominations less than or equal to a dollar are emitted as U.S. coins, while denominations greater than or equal to a dollar are emitted as
Federal Reserve Note Federal Reserve Notes, also United States banknotes, are the currently issued banknotes of the United States dollar. The United States Bureau of Engraving and Printing produces the notes under the authority of the Federal Reserve Act of 1 ...
s, disregarding these special cases: * Gold coins issued for circulation until the 1930s, up to the value of $20 (known as the ''
double eagle A double eagle is a gold coin of the United States with a denomination of $20. (Its gold content of 0.9675 troy oz (30.0926 grams) was worth $20 at the 1849 official price of $20.67/oz.) The coins are 34 mm x 2 mm and are made fro ...
'') * Bullion or commemorative
gold Gold is a chemical element with the symbol Au (from la, aurum) and atomic number 79. This makes it one of the higher atomic number elements that occur naturally. It is a bright, slightly orange-yellow, dense, soft, malleable, and ductile ...
,
silver Silver is a chemical element with the symbol Ag (from the Latin ', derived from the Proto-Indo-European ''h₂erǵ'': "shiny" or "white") and atomic number 47. A soft, white, lustrous transition metal, it exhibits the highest electrical ...
,
platinum Platinum is a chemical element with the symbol Pt and atomic number 78. It is a dense, malleable, ductile, highly unreactive, precious, silverish-white transition metal. Its name originates from Spanish , a diminutive of "silver". Pla ...
, and palladium coins valued up to $100 as legal tender (though worth far more as
bullion Bullion is non-ferrous metal that has been refined to a high standard of elemental purity. The term is ordinarily applied to bulk metal used in the production of coins and especially to precious metals such as gold and silver. It comes from ...
). * Civil War paper currency issue in denominations below $1, i.e. fractional currency, sometimes pejoratively referred to as ''
shinplaster Shinplaster was paper money of low denomination, typically less than one dollar, circulating widely in the economies of the 19th century where there was a shortage of circulating coinage. The shortage of circulating coins was primarily due ...
s''.


Etymology

In the 16th century, Count Hieronymus Schlick of
Bohemia Bohemia ( ; cs, Čechy ; ; hsb, Čěska; szl, Czechy) is the westernmost and largest historical region of the Czech Republic. Bohemia can also refer to a wider area consisting of the historical Lands of the Bohemian Crown ruled by the Boh ...
began minting coins known as ''joachimstalers'', named for Joachimstal, the valley in which the silver was mined. In turn, the valley's name is titled after Saint Joachim, whereby ''thal'' or ''tal'', a cognate of the English word , is
German German(s) may refer to: * Germany (of or related to) **Germania (historical use) * Germans, citizens of Germany, people of German ancestry, or native speakers of the German language ** For citizens of Germany, see also German nationality law **Ge ...
for 'valley.'"Ask US." ''
National Geographic ''National Geographic'' (formerly the ''National Geographic Magazine'', sometimes branded as NAT GEO) is a popular American monthly magazine published by National Geographic Partners. Known for its photojournalism, it is one of the most wide ...
''. June 2002. p. 1.
The ''joachimstaler'' was later shortened to the German '' taler'', a word that eventually found its way into many languages, including: ''tolar'' (
Czech Czech may refer to: * Anything from or related to the Czech Republic The Czech Republic, or simply Czechia, is a landlocked country in Central Europe. Historically known as Bohemia, it is bordered by Austria to the south, Germany to ...
, Slovak and Slovenian); ''daler'' ( Danish and
Swedish Swedish or ' may refer to: Anything from or related to Sweden, a country in Northern Europe. Or, specifically: * Swedish language, a North Germanic language spoken primarily in Sweden and Finland ** Swedish alphabet, the official alphabet used by ...
); ''dalar'' and ''daler'' ( Norwegian); ''daler'' or ''daalder'' (
Dutch Dutch commonly refers to: * Something of, from, or related to the Netherlands * Dutch people () * Dutch language () Dutch may also refer to: Places * Dutch, West Virginia, a community in the United States * Pennsylvania Dutch Country People ...
); '' talari'' (
Ethiopian Ethiopians are the native inhabitants of Ethiopia, as well as the global diaspora of Ethiopia. Ethiopians constitute several component ethnic groups, many of which are closely related to ethnic groups in neighboring Eritrea and other parts of ...
); ''tallér'' ( Hungarian); ''tallero'' (
Italian Italian(s) may refer to: * Anything of, from, or related to the people of Italy over the centuries ** Italians, an ethnic group or simply a citizen of the Italian Republic or Italian Kingdom ** Italian language, a Romance language *** Regional It ...
); ''دولار'' (
Arabic Arabic (, ' ; , ' or ) is a Semitic language spoken primarily across the Arab world.Semitic languages: an international handbook / edited by Stefan Weninger; in collaboration with Geoffrey Khan, Michael P. Streck, Janet C. E.Watson; Walte ...
); and ''
dollar Dollar is the name of more than 20 currencies. They include the Australian dollar, Brunei dollar, Canadian dollar, Hong Kong dollar, Jamaican dollar, Liberian dollar, Namibian dollar, New Taiwan dollar, New Zealand dollar, Singapore dol ...
'' (
English English usually refers to: * English language * English people English may also refer to: Peoples, culture, and language * ''English'', an adjective for something of, from, or related to England ** English national id ...
). Though the
Dutch Dutch commonly refers to: * Something of, from, or related to the Netherlands * Dutch people () * Dutch language () Dutch may also refer to: Places * Dutch, West Virginia, a community in the United States * Pennsylvania Dutch Country People ...
pioneered in modern-day
New York New York most commonly refers to: * New York City, the most populous city in the United States, located in the state of New York * New York (state), a state in the northeastern United States New York may also refer to: Film and television * '' ...
in the 17th century the use and the counting of money in silver dollars in the form of German-Dutch ''
reichsthaler The ''Reichsthaler'' (; modern spelling Reichstaler), or more specifically the ''Reichsthaler specie'', was a standard thaler silver coin introduced by the Holy Roman Empire in 1566 for use in all German states, minted in various versions for th ...
s'' and native Dutch '' leeuwendaalders'' ('lion dollars'), it was the ubiquitous
Spanish America Spanish America refers to the Spanish territories in the Americas during the Spanish colonization of the Americas. The term "Spanish America" was specifically used during the territories' imperial era between 15th and 19th centuries. To the ...
n eight-real coin which became exclusively known as the ''dollar'' since the 18th century.


Nicknames

The
colloquialism Colloquialism (), also called colloquial language, everyday language or general parlance, is the linguistic style used for casual (informal) communication. It is the most common functional style of speech, the idiom normally employed in conversa ...
'' buck(s)'' (much like the British ''quid'' for the
pound sterling Sterling (abbreviation: stg; Other spelling styles, such as STG and Stg, are also seen. ISO code: GBP) is the currency of the United Kingdom and nine of its associated territories. The pound ( sign: £) is the main unit of sterling, and ...
) is often used to refer to dollars of various nations, including the U.S. dollar. This term, dating to the 18th century, may have originated with the colonial
leather Leather is a strong, flexible and durable material obtained from the tanning, or chemical treatment, of animal skins and hides to prevent decay. The most common leathers come from cattle, sheep, goats, equine animals, buffalo, pigs and ho ...
trade, or it may also have originated from a
poker Poker is a family of comparing card games in which players wager over which hand is best according to that specific game's rules. It is played worldwide, however in some places the rules may vary. While the earliest known form of the game w ...
term. ''Greenback'' is another nickname, originally applied specifically to the 19th-century
Demand Note A Demand Note is a type of United States paper money that was issued between August 1861 and April 1862 during the American Civil War in denominations of 5, 10, and 20 . Demand Notes were the first issue of paper money by the United States ...
dollars, which were printed black and green on the backside, created by
Abraham Lincoln Abraham Lincoln ( ; February 12, 1809 – April 15, 1865) was an American lawyer, politician, and statesman who served as the 16th president of the United States from 1861 until his assassination in 1865. Lincoln led the nation thro ...
to finance the
North North is one of the four compass points or cardinal directions. It is the opposite of south and is perpendicular to east and west. ''North'' is a noun, adjective, or adverb indicating direction or geography. Etymology The word ''nor ...
for the
Civil War A civil war or intrastate war is a war between organized groups within the same state (or country). The aim of one side may be to take control of the country or a region, to achieve independence for a region, or to change government poli ...
. It is still used to refer to the U.S. dollar (but not to the dollars of other countries). The term ''greenback'' is also used by the financial press in other countries, such as
Australia Australia, officially the Commonwealth of Australia, is a sovereign country comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands. With an area of , Australia is the largest country b ...
,
New Zealand New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and over 700 smaller islands. It is the sixth-largest island count ...
,
South Africa South Africa, officially the Republic of South Africa (RSA), is the southernmost country in Africa. It is bounded to the south by of coastline that stretch along the South Atlantic and Indian Oceans; to the north by the neighbouring count ...
, and
India India, officially the Republic of India ( Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on th ...
. Other well-known names of the dollar as a whole in denominations include ''greenmail'', ''green'', and ''dead presidents'', the latter of which referring to the deceased presidents pictured on most bills. Dollars in general have also been known as ''bones'' (e.g. "twenty bones" = $20). The newer designs, with portraits displayed in the main body of the obverse (rather than in cameo insets), upon paper color-coded by denomination, are sometimes referred to as ''bigface'' notes or ''
Monopoly A monopoly (from Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situation where a spe ...
money''. ''
Piastre The piastre or piaster () is any of a number of units of currency. The term originates from the Italian for "thin metal plate". The name was applied to Spanish and Hispanic American pieces of eight, or pesos, by Venetian traders in the Levan ...
'' was the original French word for the U.S. dollar, used for example in the French text of the
Louisiana Purchase The Louisiana Purchase (french: Vente de la Louisiane, translation=Sale of Louisiana) was the acquisition of the territory of Louisiana by the United States from the French First Republic in 1803. In return for fifteen million dollars, or app ...
. Though the U.S. dollar is called ''dollar'' in Modern French, the term ''piastre'' is still used among the speakers of
Cajun French Louisiana French ( frc, français de la Louisiane; lou, françé la lwizyàn) is an umbrella term for the dialects and varieties of the French language spoken traditionally by French Louisianians in colonial Lower Louisiana. As of today Louis ...
and
New England French New England French (french: français de Nouvelle-Angleterre) is a variety of French spoken in the New England region of the United States. It descends from Canadian French because it originally came from French Canadians who immigrated to New E ...
, as well as speakers in
Haiti Haiti (; ht, Ayiti ; French: ), officially the Republic of Haiti (); ) and formerly known as Hayti, is a country located on the island of Hispaniola in the Greater Antilles archipelago of the Caribbean Sea, east of Cuba and Jamaica, and ...
and other French-speaking Caribbean islands. Nicknames specific to denomination: * The quarter dollar coin is known as ''two bits'', betraying the dollar's origins as the "piece of eight" (bits or ''reales''). * The $1 bill is nicknamed ''buck'' or ''single''. * The infrequently-used $2 bill is sometimes called ''deuce'', ''Tom'', or ''Jefferson'' (after
Thomas Jefferson Thomas Jefferson (April 13, 1743 – July 4, 1826) was an American statesman, diplomat, lawyer, architect, philosopher, and Founding Father who served as the third president of the United States from 1801 to 1809. He was previously the nati ...
). * The $5 bill is sometimes called ''Lincoln'', ''fin'', ''fiver'', or ''five-spot''. * The $10 bill is sometimes called ''sawbuck'', ''ten-spot'', or ''Hamilton'' (after
Alexander Hamilton Alexander Hamilton (January 11, 1755 or 1757July 12, 1804) was an American military officer, statesman, and Founding Father who served as the first United States secretary of the treasury from 1789 to 1795. Born out of wedlock in Charl ...
). * The $20 bill is sometimes called ''double sawbuck'', ''Jackson'' (after
Andrew Jackson Andrew Jackson (March 15, 1767 – June 8, 1845) was an American lawyer, planter, general, and statesman who served as the seventh president of the United States from 1829 to 1837. Before being elected to the presidency, he gained fame as ...
), or ''
double eagle A double eagle is a gold coin of the United States with a denomination of $20. (Its gold content of 0.9675 troy oz (30.0926 grams) was worth $20 at the 1849 official price of $20.67/oz.) The coins are 34 mm x 2 mm and are made fro ...
''. * The $50 bill is sometimes called a ''yardstick'', or a ''grant'', after President Ulysses S. Grant. * The $100 bill is called ''Benjamin'', ''Benji'', ''Ben'', or ''Franklin'', referring to its portrait of
Benjamin Franklin Benjamin Franklin ( April 17, 1790) was an American polymath who was active as a writer, scientist, inventor, statesman, diplomat, printer, publisher, and political philosopher. Encyclopædia Britannica, Wood, 2021 Among the leading in ...
. Other nicknames include ''C-note'' (C being the
Roman numeral Roman numerals are a numeral system that originated in ancient Rome and remained the usual way of writing numbers throughout Europe well into the Late Middle Ages. Numbers are written with combinations of letters from the Latin alphabet, ...
for 100), ''century note'', or ''bill'' (e.g. ''two bills'' = $200). * Amounts or multiples of $1,000 are sometimes called ''
grand Grand may refer to: People with the name * Grand (surname) * Grand L. Bush (born 1955), American actor * Grand Mixer DXT, American turntablist * Grand Puba (born 1966), American rapper Places * Grand, Oklahoma * Grand, Vosges, village and c ...
'' in colloquial speech, abbreviated in written form to ''G'', ''K'', or ''k'' (from ''kilo''; e.g. $10k = $10,000). Likewise, a ''large'' or ''stack'' can also refer to a multiple of $1,000 (e.g. "fifty large" = $50,000).


Dollar sign

The symbol , usually written before the numerical amount, is used for the U.S. dollar (as well as for many other currencies). The sign was the result of a late 18th-century evolution of the
scribal abbreviation Scribal abbreviations or sigla ( singular: siglum) are abbreviations used by ancient and medieval scribes writing in various languages, including Latin, Greek, Old English and Old Norse. In modern manuscript editing (substantive and mechan ...
''ps'' for the
peso The peso is the monetary unit of several countries in the Americas, and the Philippines. Originating in the Spanish Empire, the word translates to "weight". In most countries the peso uses the same sign, "$", as many currencies named " doll ...
, the common name for the Spanish dollars that were in wide circulation in the
New World The term ''New World'' is often used to mean the majority of Earth's Western Hemisphere, specifically the Americas."America." ''The Oxford Companion to the English Language'' (). McArthur, Tom, ed., 1992. New York: Oxford University Press, p. 3 ...
from the 16th to the 19th centuries. The ''p'' and the ''s'' eventually came to be written over each other giving rise to ''$''. Another popular explanation is that it is derived from the
Pillars of Hercules The Pillars of Hercules ( la, Columnae Herculis, grc, Ἡράκλειαι Στῆλαι, , ar, أعمدة هرقل, Aʿmidat Hiraql, es, Columnas de Hércules) was the phrase that was applied in Antiquity to the promontories that flank t ...
on the Spanish Coat of arms of the
Spanish dollar The Spanish dollar, also known as the piece of eight ( es, Real de a ocho, , , or ), is a silver coin of approximately diameter worth eight Spanish reales. It was minted in the Spanish Empire following a monetary reform in 1497 with content ...
. These
Pillars of Hercules The Pillars of Hercules ( la, Columnae Herculis, grc, Ἡράκλειαι Στῆλαι, , ar, أعمدة هرقل, Aʿmidat Hiraql, es, Columnas de Hércules) was the phrase that was applied in Antiquity to the promontories that flank t ...
on the silver Spanish dollar coins take the form of two vertical bars (, , ) and a swinging cloth band in the shape of an ''S''. Yet another explanation suggests that the dollar sign was formed from the capital letters ''U'' and ''S'' written or printed one on top of the other. This theory, popularized by novelist
Ayn Rand Alice O'Connor (born Alisa Zinovyevna Rosenbaum;, . Most sources transliterate her given name as either ''Alisa'' or ''Alissa''. , 1905 – March 6, 1982), better known by her pen name Ayn Rand (), was a Russian-born American writer and ...
in ''
Atlas Shrugged ''Atlas Shrugged'' is a 1957 novel by Ayn Rand. It was her longest novel, the fourth and final one published during her lifetime, and the one she considered her '' magnum opus'' in the realm of fiction writing. ''Atlas Shrugged'' includes eleme ...
'', does not consider the fact that the symbol was already in use before the formation of the United States.


History


Origins: the Spanish dollar

The U.S. dollar was introduced at par with the Spanish-American silver dollar (or ''Spanish peso'', ''Spanish milled dollar'', ''eight-real coin'', ''piece-of-eight''). The latter was produced from the rich silver mine output of
Spanish America Spanish America refers to the Spanish territories in the Americas during the Spanish colonization of the Americas. The term "Spanish America" was specifically used during the territories' imperial era between 15th and 19th centuries. To the ...
; minted in
Mexico City Mexico City ( es, link=no, Ciudad de México, ; abbr.: CDMX; Nahuatl: ''Altepetl Mexico'') is the capital and largest city of Mexico, and the most populous city in North America. One of the world's alpha cities, it is located in the Valley o ...
,
Potosí Potosí, known as Villa Imperial de Potosí in the colonial period, is the capital city and a municipality of the Department of Potosí in Bolivia. It is one of the highest cities in the world at a nominal . For centuries, it was the location o ...
(Bolivia),
Lima Lima ( ; ), originally founded as Ciudad de Los Reyes (City of The Kings) is the capital and the largest city of Peru. It is located in the valleys of the Chillón, Rímac and Lurín Rivers, in the desert zone of the central coastal part of ...
(Peru) and elsewhere; and was in wide circulation throughout the Americas, Asia and Europe from the 16th to 19th centuries. The minting of machine-milled Spanish dollars since 1732 boosted its worldwide reputation as a trade coin and positioned it to be model for the new currency of the
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territor ...
. Even after the
United States Mint The United States Mint is a bureau of the Department of the Treasury responsible for producing coinage for the United States to conduct its trade and commerce, as well as controlling the movement of bullion. It does not produce paper money; tha ...
commenced issuing coins in 1792, locally minted ''dollars'' and ''cents'' were less abundant in circulation than
Spanish America Spanish America refers to the Spanish territories in the Americas during the Spanish colonization of the Americas. The term "Spanish America" was specifically used during the territories' imperial era between 15th and 19th centuries. To the ...
n ''pesos'' and ''reales''; hence Spanish, Mexican and American dollars all remained legal tender in the United States until the Coinage Act of 1857. In particular, Colonists' familiarity with the Spanish two-''real quarter peso'' was the reason for issuing a quasi-decimal 25-cent quarter dollar coin rather than a 20-cent coin. For the relationship between the
Spanish dollar The Spanish dollar, also known as the piece of eight ( es, Real de a ocho, , , or ), is a silver coin of approximately diameter worth eight Spanish reales. It was minted in the Spanish Empire following a monetary reform in 1497 with content ...
and the individual state colonial currencies, see Connecticut pound, Delaware pound, Georgia pound, Maryland pound,
Massachusetts pound The pound was the currency of the Commonwealth of Massachusetts and its colonial predecessors until 1793. The Massachusetts pound used the £sd currency system of 1 pound divided into 20 shillings, each of 12 pence. Initially, sterling coin and ...
, New Hampshire pound, New Jersey pound, New York pound, North Carolina pound, Pennsylvania pound, Rhode Island pound, South Carolina pound, and Virginia pound.


Coinage Act of 1792

On July 6, 1785, the
Continental Congress The Continental Congress was a series of legislative bodies, with some executive function, for thirteen of Britain's colonies in North America, and the newly declared United States just before, during, and after the American Revolutionary War. ...
resolved that the money unit of the United States, the dollar, would contain 375.64
grains A grain is a small, hard, dry fruit ( caryopsis) – with or without an attached hull layer – harvested for human or animal consumption. A grain crop is a grain-producing plant. The two main types of commercial grain crops are cereals and legum ...
of fine silver; on August 8, 1786, the Continental Congress continued that definition and further resolved that the money of account, corresponding with the division of coins, would proceed in a decimal ratio, with the sub-units being mills at 0.001 of a dollar, cents at 0.010 of a dollar, and dimes at 0.100 of a dollar. After the adoption of the
United States Constitution The Constitution of the United States is the supreme law of the United States of America. It superseded the Articles of Confederation, the nation's first constitution, in 1789. Originally comprising seven articles, it delineates the nati ...
, the U.S. dollar was defined by the Coinage Act of 1792. It specified a "dollar" based on the Spanish milled dollar to contain
grain A grain is a small, hard, dry fruit (caryopsis) – with or without an attached hull layer – harvested for human or animal consumption. A grain crop is a grain-producing plant. The two main types of commercial grain crops are cereals and legume ...
s of fine silver, or of "standard silver" of fineness 371.25/416 = 89.24%; as well as an "eagle" to contain grains of fine gold, or of 22 karat or 91.67% fine gold.
Alexander Hamilton Alexander Hamilton (January 11, 1755 or 1757July 12, 1804) was an American military officer, statesman, and Founding Father who served as the first United States secretary of the treasury from 1789 to 1795. Born out of wedlock in Charl ...
arrived at these numbers based on a treasury assay of the average fine silver content of a selection of worn
Spanish dollar The Spanish dollar, also known as the piece of eight ( es, Real de a ocho, , , or ), is a silver coin of approximately diameter worth eight Spanish reales. It was minted in the Spanish Empire following a monetary reform in 1497 with content ...
s, which came out to be 371 grains. Combined with the prevailing gold-silver ratio of 15, the standard for gold was calculated at 371/15 = 24.73 grains fine gold or 26.98 grains 22K gold. Rounding the latter to 27.0 grains finalized the dollar's standard to 24.75 grains of fine gold or 24.75*15 = 371.25 grains = 24.0566 grams = 0.7735 troy ounces of fine silver. The same coinage act also set the value of an eagle at 10 dollars, and the dollar at eagle. It called for silver coins in denominations of 1, , , , and dollar, as well as gold coins in denominations of 1, and eagle. The value of gold or silver contained in the dollar was then converted into relative value in the economy for the buying and selling of goods. This allowed the value of things to remain fairly constant over time, except for the influx and outflux of gold and silver in the nation's economy. Though a
Spanish dollar The Spanish dollar, also known as the piece of eight ( es, Real de a ocho, , , or ), is a silver coin of approximately diameter worth eight Spanish reales. It was minted in the Spanish Empire following a monetary reform in 1497 with content ...
freshly minted after 1772 theoretically contained 417.7 grains of silver of fineness 130/144 (or 377.1 grains fine silver), reliable assays of the period in fact confirmed a fine silver content of for the average Spanish dollar in circulation. The new U.S. silver dollar of therefore compared favorably and was received at par with the Spanish dollar for foreign payments, and after 1803 the
United States Mint The United States Mint is a bureau of the Department of the Treasury responsible for producing coinage for the United States to conduct its trade and commerce, as well as controlling the movement of bullion. It does not produce paper money; tha ...
had to suspend making this coin out of its limited resources since it failed to stay in domestic circulation. It was only after Mexican independence in 1821 when their peso's fine silver content of 377.1 grains was firmly upheld, which the U.S. later had to compete with using a heavier Trade dollar coin.


Design

The early currency of the United States did not exhibit faces of presidents, as is the custom now; although today, by law, only the portrait of a deceased individual may appear on United States currency. In fact, the newly formed government was against having portraits of leaders on the currency, a practice compared to the policies of European monarchs. The currency as we know it today did not get the faces they currently have until after the early 20th century; before that "heads" side of coinage used profile faces and striding, seated, and standing figures from Greek and Roman mythology and composite Native Americans. The last coins to be converted to profiles of historic Americans were the dime (1946) and the Dollar (1971).


Continental currency

After the
American Revolution The American Revolution was an ideological and political revolution that occurred in British America between 1765 and 1791. The Americans in the Thirteen Colonies formed independent states that defeated the British in the American Revo ...
, the
thirteen colonies The Thirteen Colonies, also known as the Thirteen British Colonies, the Thirteen American Colonies, or later as the United Colonies, were a group of British colonies on the Atlantic coast of North America. Founded in the 17th and 18th cent ...
became
independent Independent or Independents may refer to: Arts, entertainment, and media Artist groups * Independents (artist group), a group of modernist painters based in the New Hope, Pennsylvania, area of the United States during the early 1930s * Independ ...
. Freed from British monetary regulations, they each issued
£sd £sd (occasionally written Lsd, spoken as "pounds, shillings and pence" or pronounced ) is the popular name for the pre-decimal currencies once common throughout Europe, especially in the British Isles and hence in several countries of the ...
paper money to pay for military expenses. The
Continental Congress The Continental Congress was a series of legislative bodies, with some executive function, for thirteen of Britain's colonies in North America, and the newly declared United States just before, during, and after the American Revolutionary War. ...
also began issuing "Continental Currency" denominated in Spanish dollars. For its value relative to states' currencies, see
Early American currency Early American currency went through several stages of development during the colonial and post-Revolutionary history of the United States. John Hull was authorized by the Massachusetts legislature to make the earliest coinage of the colony (the ...
. Continental currency depreciated badly during the war, giving rise to the famous phrase "not worth a continental". A primary problem was that monetary policy was not coordinated between Congress and the states, which continued to issue bills of credit. Additionally, neither Congress nor the governments of the several states had the will or the means to retire the bills from circulation through taxation or the sale of bonds. The currency was ultimately replaced by the silver dollar at the rate of 1 silver dollar to 1000 continental dollars. It gave rise to the phrase "not worth a continental", and was responsible for the clause in article 1, section 10 of the
United States Constitution The Constitution of the United States is the supreme law of the United States of America. It superseded the Articles of Confederation, the nation's first constitution, in 1789. Originally comprising seven articles, it delineates the nati ...
which reads: "No state shall... make anything but gold and silver coin a tender in payment of debts".


Silver and gold standards, 19th century

From implementation of the 1792 Mint Act to the 1900 implementation of the
gold standard A gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold. The gold standard was the basis for the international monetary system from the 1870s to the early 1920s, and from th ...
the dollar was on a bimetallic silver-and-gold standard, defined as either 371.25
grains A grain is a small, hard, dry fruit ( caryopsis) – with or without an attached hull layer – harvested for human or animal consumption. A grain crop is a grain-producing plant. The two main types of commercial grain crops are cereals and legum ...
(24.056 g) of fine silver or 24.75 grains of fine gold (gold-silver ratio 15). Subsequent to the
Coinage Act of 1834 The Coinage Act of 1834 was passed by the United States Congress on June 28, 1834. It raised the silver-to-gold weight ratio from its 1792 level of 15:1 (established by the Coinage Act of 1792) to 16:1 thus setting the mint price for silver at a le ...
the dollar's fine gold equivalent was revised to 23.2 grains; it was slightly adjusted to in 1837 (gold-silver ratio ~16). The same act also resolved the difficulty in minting the "standard silver" of 89.24% fineness by revising the dollar's alloy to 412.5 grains, 90% silver, still containing 371.25 grains fine silver. Gold was also revised to 90% fineness: 25.8 grains gross, 23.22 grains fine gold. Following the rise in the price of silver during the
California Gold Rush The California Gold Rush (1848–1855) was a gold rush that began on January 24, 1848, when gold was found by James W. Marshall at Sutter's Mill in Coloma, California. The news of gold brought approximately 300,000 people to California f ...
and the disappearance of circulating silver coins, the Coinage Act of 1853 reduced the standard for silver coins less than $1 from 412.5 grains to , 90% silver per 100 cents (slightly revised to 25.0 g, 90% silver in 1873). The Act also limited the
free silver Free silver was a major economic policy issue in the United States in the late 19th-century. Its advocates were in favor of an expansionary monetary policy featuring the unlimited coinage of silver into money on-demand, as opposed to strict adhe ...
right of individuals to convert
bullion Bullion is non-ferrous metal that has been refined to a high standard of elemental purity. The term is ordinarily applied to bulk metal used in the production of coins and especially to precious metals such as gold and silver. It comes from ...
into only one coin, the silver dollar of 412.5 grains; smaller coins of lower standard can only be produced by the
United States Mint The United States Mint is a bureau of the Department of the Treasury responsible for producing coinage for the United States to conduct its trade and commerce, as well as controlling the movement of bullion. It does not produce paper money; tha ...
using its own bullion. Summary and links to coins issued in the 19th century: * In base metal: 1/2 cent, 1 cent, 5 cents. * In silver:
half dime The half dime, or half disme, was a silver coin, valued at five cents, formerly minted in the United States. Some numismatists consider the denomination to be the first business strike coin minted by the United States Mint under the Coinage ...
, dime, quarter dollar, half dollar, silver dollar. * In gold: gold $1, $2.50 quarter eagle, $5 half eagle, $10 eagle, $20 double eagle * Less common denominations: bronze 2 cents, nickel 3 cents, silver 3 cents, silver 20 cents, gold $3.


Note issues, 19th century

In order to finance the
War of 1812 The War of 1812 (18 June 1812 – 17 February 1815) was fought by the United States of America and its indigenous allies against the United Kingdom and its allies in British North America, with limited participation by Spain in Florida. It b ...
, Congress authorized the issuance of Treasury Notes, interest-bearing short-term debt that could be used to pay public dues. While they were intended to serve as debt, they did function "to a limited extent" as money. Treasury Notes were again printed to help resolve the reduction in public revenues resulting from the
Panic of 1837 The Panic of 1837 was a financial crisis in the United States that touched off a major depression, which lasted until the mid-1840s. Profits, prices, and wages went down, westward expansion was stalled, unemployment went up, and pessimism aboun ...
and the
Panic of 1857 The Panic of 1857 was a financial panic in the United States caused by the declining international economy and over-expansion of the domestic economy. Because of the invention of the telegraph by Samuel F. Morse in 1844, the Panic of 1857 wa ...
, as well as to help finance the
Mexican–American War The Mexican–American War, also known in the United States as the Mexican War and in Mexico as the (''United States intervention in Mexico''), was an armed conflict between the United States and Mexico from 1846 to 1848. It followed the ...
and the
Civil War A civil war or intrastate war is a war between organized groups within the same state (or country). The aim of one side may be to take control of the country or a region, to achieve independence for a region, or to change government poli ...
. Paper money was issued again in 1862 without the backing of precious metals due to the
Civil War A civil war or intrastate war is a war between organized groups within the same state (or country). The aim of one side may be to take control of the country or a region, to achieve independence for a region, or to change government poli ...
. In addition to Treasury Notes, Congress in 1861 authorized the Treasury to borrow $50 million in the form of Demand Notes, which did not bear interest but could be redeemed on demand for precious metals. However, by December 1861, the Union government's supply of specie was outstripped by demand for redemption and they were forced to suspend redemption temporarily. In February 1862 Congress passed the ''Legal Tender Act of 1862'', issuing United States Notes, which were not redeemable on demand and bore no interest, but were
legal tender Legal tender is a form of money that courts of law are required to recognize as satisfactory payment for any monetary debt. Each jurisdiction determines what is legal tender, but essentially it is anything which when offered ("tendered") in p ...
, meaning that creditors had to accept them at face value for any payment except for public debts and import tariffs. However, silver and gold coins continued to be issued, resulting in the depreciation of the newly printed notes through
Gresham's Law In economics, Gresham's law is a monetary principle stating that "bad money drives out good". For example, if there are two forms of commodity money in circulation, which are accepted by law as having similar face value, the more valuable com ...
. In 1869, Supreme Court ruled in Hepburn v. Griswold that Congress could not require creditors to accept United States Notes, but overturned that ruling the next year in the Legal Tender Cases. In 1875, Congress passed the '' Specie Payment Resumption Act'', requiring the Treasury to allow U.S. Notes to be redeemed for gold after January 1, 1879.


Gold standard, 20th century

Though the dollar came under the
gold standard A gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold. The gold standard was the basis for the international monetary system from the 1870s to the early 1920s, and from th ...
''de jure'' only after 1900, the bimetallic era was ended ''de facto'' when the Coinage Act of 1873 suspended the minting of the standard silver dollar of 412.5 grains (26.73 g = 0.8595 oz t), the only fully legal tender coin that individuals could convert bullion into in unlimited (or
Free silver Free silver was a major economic policy issue in the United States in the late 19th-century. Its advocates were in favor of an expansionary monetary policy featuring the unlimited coinage of silver into money on-demand, as opposed to strict adhe ...
) quantities, and right at the onset of the silver rush from the
Comstock Lode The Comstock Lode is a lode of silver ore located under the eastern slope of Mount Davidson, a peak in the Virginia Range in Virginia City, Nevada (then western Utah Territory), which was the first major discovery of silver ore in the Unit ...
in the 1870s. This was the so-called "Crime of '73". The ''
Gold Standard Act The Gold Standard Act was an Act of the United States Congress, signed by President William McKinley and effective on March 14, 1900, defining the United States dollar by gold weight and requiring the United States Treasury to redeem, on demand ...
'' of 1900 repealed the U.S. dollar's historic link to silver and defined it solely as of fine gold (or $20.67 per
troy ounce Troy weight is a system of units of mass that originated in 15th-century England, and is primarily used in the precious metals industry. The troy weight units are the grain, the pennyweight (24 grains), the troy ounce (20 pennyweights), an ...
of 480 grains). In 1933, gold coins were confiscated by Executive Order 6102 under Franklin D. Roosevelt, and in 1934 the standard was changed to $35 per troy ounce fine gold, or per dollar. After 1968 a series of revisions to the gold peg was implemented, culminating in the Nixon Shock of August 15, 1971, which suddenly ended the convertibility of dollars to gold. The U.S. dollar has since floated freely on the
foreign exchange market The foreign exchange market (Forex, FX, or currency market) is a global decentralized or over-the-counter (OTC) market for the trading of currencies. This market determines foreign exchange rates for every currency. It includes all as ...
s.


Federal Reserve Notes, 20th century to present

Congress continued to issue paper money after the Civil War, the latest of which is the
Federal Reserve Note Federal Reserve Notes, also United States banknotes, are the currently issued banknotes of the United States dollar. The United States Bureau of Engraving and Printing produces the notes under the authority of the Federal Reserve Act of 1 ...
that was authorized by the Federal Reserve Act of 1913. Since the discontinuation of all other types of notes (Gold Certificates in 1933, Silver Certificates in 1963, and United States Notes in 1971), U.S. dollar notes have since been issued exclusively as
Federal Reserve Note Federal Reserve Notes, also United States banknotes, are the currently issued banknotes of the United States dollar. The United States Bureau of Engraving and Printing produces the notes under the authority of the Federal Reserve Act of 1 ...
s.


Emergence as reserve currency

The U.S. dollar first emerged as an important international
reserve currency A reserve currency (or anchor currency) is a foreign currency that is held in significant quantities by central banks or other monetary authorities as part of their foreign exchange reserves. The reserve currency can be used in international t ...
in the 1920s, displacing the British
pound sterling Sterling (abbreviation: stg; Other spelling styles, such as STG and Stg, are also seen. ISO code: GBP) is the currency of the United Kingdom and nine of its associated territories. The pound ( sign: £) is the main unit of sterling, and ...
as it emerged from the
First World War World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fighti ...
relatively unscathed and since the United States was a significant recipient of wartime gold inflows. After the United States emerged as an even stronger global
superpower A superpower is a state with a dominant position characterized by its extensive ability to exert influence or project power on a global scale. This is done through the combined means of economic, military, technological, political and cultural ...
during the
Second World War World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposi ...
, the
Bretton Woods Agreement The Bretton Woods system of monetary management established the rules for commercial and financial relations among the United States, Canada, Western European countries, Australia, and Japan after the 1944 Bretton Woods Agreement. The Bretto ...
of 1944 established the U.S. dollar as the world's primary reserve currency and the only post-war currency linked to gold. Despite all links to gold being severed in 1971, the dollar continues to be the world's foremost reserve currency for international trade to this day. The Bretton Woods Agreement of 1944 also defined the post-World War II monetary order and relations among modern-day independent states, by setting up a system of rules, institutions, and procedures to regulate the international monetary system. The agreement founded the
International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster gl ...
and other institutions of the modern-day
World Bank Group The World Bank Group (WBG) is a family of five international organizations that make leveraged loans to developing countries. It is the largest and best-known development bank in the world and an observer at the United Nations Development ...
, establishing the infrastructure for conducting international payments and accessing the global capital markets using the U.S. dollar. The monetary policy of the United States is conducted by the
Federal Reserve System The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after ...
, which acts as the nation's
central bank A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union, and oversees their commercial banking system. In contrast to a commercial bank, a central b ...
. It was founded in 1913 under the
Federal Reserve Act The Federal Reserve Act was passed by the 63rd United States Congress and signed into law by President Woodrow Wilson on December 23, 1913. The law created the Federal Reserve System, the central banking system of the United States. The Panic ...
in order to furnish an elastic currency for the United States and to supervise its banking system, particularly in the aftermath of the
Panic of 1907 The Panic of 1907, also known as the 1907 Bankers' Panic or Knickerbocker Crisis, was a financial crisis that took place in the United States over a three-week period starting in mid-October, when the New York Stock Exchange fell almost 50% fro ...
. For most of the post-war period, the
U.S. government The federal government of the United States (U.S. federal government or U.S. government) is the national government of the United States, a federal republic located primarily in North America, composed of 50 states, a city within a fed ...
has financed its own spending by borrowing heavily from the dollar-lubricated global capital markets, in debts denominated in its own currency and at minimal interest rates. This ability to borrow heavily without facing a significant balance of payments crisis has been described as the
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territor ...
's exorbitant privilege.


Coins

The
United States Mint The United States Mint is a bureau of the Department of the Treasury responsible for producing coinage for the United States to conduct its trade and commerce, as well as controlling the movement of bullion. It does not produce paper money; tha ...
has issued legal tender coins every year from 1792 to the present. From 1934 to the present, the only denominations produced for circulation have been the familiar penny, nickel, dime, quarter, half dollar, and dollar. Gold and silver coins have been previously minted for general circulation from the 18th to the 20th centuries. The last gold coins were minted in 1933. The last 90% silver coins were minted in 1964, and the last 40% silver half dollar was minted in 1970. The
United States Mint The United States Mint is a bureau of the Department of the Treasury responsible for producing coinage for the United States to conduct its trade and commerce, as well as controlling the movement of bullion. It does not produce paper money; tha ...
currently produces circulating coins at the
Philadelphia Philadelphia, often called Philly, is the largest city in the Commonwealth of Pennsylvania, the sixth-largest city in the U.S., the second-largest city in both the Northeast megalopolis and Mid-Atlantic regions after New York City. Sinc ...
and Denver Mints, and commemorative and proof coins for collectors at the
San Francisco San Francisco (; Spanish for " Saint Francis"), officially the City and County of San Francisco, is the commercial, financial, and cultural center of Northern California. The city proper is the fourth most populous in California and 17t ...
and West Point Mints. Mint mark conventions for these and for past mint branches are discussed in '' Coins of the United States dollar#Mint marks''. The one-dollar coin has never been in popular circulation from 1794 to present, despite several attempts to increase their usage since the 1970s, the most important reason of which is the continued production and popularity of the one-dollar bill. Half dollar coins were commonly used currency since inception in 1794, but has fallen out of use from the mid-1960s when all silver half dollars began to be hoarded. The
nickel Nickel is a chemical element with symbol Ni and atomic number 28. It is a silvery-white lustrous metal with a slight golden tinge. Nickel is a hard and ductile transition metal. Pure nickel is chemically reactive but large pieces are slow ...
is the only coin whose size and composition (5 grams, 75% copper, and 25% nickel) is still in use from 1865 to today, except for wartime 1942-1945 Jefferson nickels which contained silver. Due to the penny's low value, some efforts have been made to eliminate the penny as circulating coinage. For a discussion of other discontinued and canceled denominations, see '' Obsolete denominations of United States currency#Coinage'' and '' Canceled denominations of United States currency#Coinage''.


Collector coins

Collector coins are technically legal tender at face value but are usually worth far more due to their numismatic value or for their precious metal content. These include: * American Eagle bullion coins ** American Silver Eagle $1 (1 troy oz) Silver bullion coin 1986–present **
American Gold Eagle The American Gold Eagle is an official gold bullion coin of the United States. Authorized under the Gold Bullion Coin Act of 1985, it was first released by the United States Mint in 1986. Because the term "eagle" also is the official United ...
$5 ( troy oz), $10 ( troy oz), $25 ( troy oz), and $50 (1 troy oz) Gold bullion coin 1986–present ** American Platinum Eagle $10 ( troy oz), $25 ( troy oz), $50 ( troy oz), and $100 (1 troy oz) Platinum bullion coin 1997–present ** American Palladium Eagle $25 (1 troy oz) Palladium bullion coin 2017–present * United States commemorative coins—special issue coins, among these: ** $50.00 (Half Union) minted for the Panama-Pacific International Exposition (1915) **Silver proof sets minted since 1992 with dimes, quarters and half-dollars made of silver rather than the standard copper-nickel ** Presidential dollar coins proof sets minted since 2007


Banknotes

The U.S. Constitution provides that Congress shall have the power to "borrow money on the credit of the United States." Congress has exercised that power by authorizing Federal Reserve Banks to issue Federal Reserve Notes. Those notes are "obligations of the United States" and "shall be redeemed in lawful money on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve bank". Federal Reserve Notes are designated by law as "
legal tender Legal tender is a form of money that courts of law are required to recognize as satisfactory payment for any monetary debt. Each jurisdiction determines what is legal tender, but essentially it is anything which when offered ("tendered") in p ...
" for the payment of debts. Congress has also authorized the issuance of more than 10 other types of banknotes, including the United States Note and the Federal Reserve Bank Note. The Federal Reserve Note is the only type that remains in circulation since the 1970s. Federal Reserve Notes are printed by the
Bureau of Engraving and Printing The Bureau of Engraving and Printing (BEP) is a government agency within the United States Department of the Treasury that designs and produces a variety of security products for the United States government, most notable of which is Federal Re ...
and are made from cotton fiber paper (as opposed to wood fiber used to make common paper). The " large-sized notes" issued before 1928 measured , while small-sized notes introduced that year measure . The dimensions of the modern (small-size) U.S. currency is identical to the size of
Philippine peso The Philippine peso, also referred to by its Tagalog name ''piso'' ( Philippine English: , , plural pesos; tl, piso ; sign: ₱; code: PHP), is the official currency of the Philippines. It is subdivided into 100 ''sentimo'', also called ...
banknotes issued under United States administration after 1903, which had proven highly successful. The American large-note bills became known as "horse blankets" or "saddle blankets." Currently printed denominations are $1, $2, $5, $10, $20, $50, and $100. Notes above the $100 denomination stopped being printed in 1946 and were officially withdrawn from circulation in 1969. These notes were used primarily in inter-bank transactions or by
organized crime Organized crime (or organised crime) is a category of transnational, national, or local groupings of highly centralized enterprises run by criminals to engage in illegal activity, most commonly for profit. While organized crime is generally th ...
; it was the latter usage that prompted President
Richard Nixon Richard Milhous Nixon (January 9, 1913April 22, 1994) was the 37th president of the United States, serving from 1969 to 1974. A member of the Republican Party, he previously served as a representative and senator from California and was ...
to issue an executive order in 1969 halting their use. With the advent of electronic banking, they became less necessary. Notes in denominations of $500, $1,000, $5,000, $10,000, and $100,000 were all produced at one time; see large denomination bills in U.S. currency for details. With the exception of the $100,000 bill (which was only issued as a Series 1934 Gold Certificate and was never publicly circulated; thus it is illegal to own), these notes are now collectors' items and are worth more than their face value to collectors. Though still predominantly green, the post-2004 series incorporate other colors to better distinguish different denominations. As a result of a 2008 decision in an accessibility lawsuit filed by the American Council of the Blind, the
Bureau of Engraving and Printing The Bureau of Engraving and Printing (BEP) is a government agency within the United States Department of the Treasury that designs and produces a variety of security products for the United States government, most notable of which is Federal Re ...
is planning to implement a raised tactile feature in the next redesign of each note, except the $1 and the current version of the $100 bill. It also plans larger, higher-contrast numerals, more color differences, and distribution of currency readers to assist the visually impaired during the transition period.


Countries that use US dollar


Formal

* * * * * * * * * *


Informal

* * * * * * * * * * *


Monetary policy

The
Federal Reserve Act The Federal Reserve Act was passed by the 63rd United States Congress and signed into law by President Woodrow Wilson on December 23, 1913. The law created the Federal Reserve System, the central banking system of the United States. The Panic ...
created the
Federal Reserve System The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after ...
in 1913 as the
central bank A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union, and oversees their commercial banking system. In contrast to a commercial bank, a central b ...
of the
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territor ...
. Its primary task is to conduct the nation's
monetary policy Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, ofte ...
to promote maximum employment, stable prices, and moderate long-term interest rates in the U.S. economy. It is also tasked to promote the stability of the financial system and regulate financial institutions, and to act as lender of last resort. The Monetary policy of the United States is conducted by the
Federal Open Market Committee The Federal Open Market Committee (FOMC), a committee within the Federal Reserve System (the Fed), is charged under United States law with overseeing the nation's open market operations (e.g., the Fed's buying and selling of United States Treas ...
, which is composed of the Federal Reserve Board of Governors and 5 out of the 12 Federal Reserve Bank presidents, and is implemented by all twelve regional Federal Reserve Banks.
Monetary policy Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, ofte ...
refers to actions made by central banks that determine the size and growth rate of the
money supply In macroeconomics, the money supply (or money stock) refers to the total volume of currency held by the public at a particular point in time. There are several ways to define "money", but standard measures usually include currency in circul ...
available in the economy, and which would result in desired objectives like low inflation, low unemployment, and stable financial systems. The economy's aggregate
money supply In macroeconomics, the money supply (or money stock) refers to the total volume of currency held by the public at a particular point in time. There are several ways to define "money", but standard measures usually include currency in circul ...
is the total of * M0 money, or Monetary Base - "dollars" in currency and
bank money Demand deposits or checkbook money are funds held in demand accounts in commercial banks. These account balances are usually considered money and form the greater part of the narrowly defined money supply of a country. Simply put, these are depo ...
balances credited to the central bank's depositors, which are backed by the central bank's assets, * plus M1, M2, M3 money - "dollars" in the form of
bank money Demand deposits or checkbook money are funds held in demand accounts in commercial banks. These account balances are usually considered money and form the greater part of the narrowly defined money supply of a country. Simply put, these are depo ...
balances credited to banks' depositors, which are backed by the bank's assets and investments. The FOMC influences the level of money available to the economy by the following means: * Reserve requirements - specifies a required minimum percentage of deposits in a
commercial bank A commercial bank is a financial institution which accepts deposits from the public and gives loans for the purposes of consumption and investment to make profit. It can also refer to a bank, or a division of a large bank, which deals with ...
that should be held as a reserve (i.e. as deposits with the Federal Reserve), with the rest available to loan or invest. Higher requirements mean less money loaned or invested, helping keep inflation in check. Raising the
federal funds rate In the United States, the federal funds rate is the interest rate at which depository institutions (banks and credit unions) lend reserve balances to other depository institutions overnight on an uncollateralized basis. Reserve balances a ...
earned on those reserves also helps achieve this objective. * Open market operations - the Federal Reserve buys or sells US Treasury bonds and other securities held by banks in exchange for reserves; more reserves increase a bank's capacity to loan or invest elsewhere. * Discount window lending - banks can borrow from the Federal Reserve.
Monetary policy Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, ofte ...
directly affects interest rates; it indirectly affects stock prices, wealth, and currency exchange rates. Through these channels, monetary policy influences spending, investment, production, employment, and inflation in the United States. Effective
monetary policy Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, ofte ...
complements
fiscal policy In economics and political science, fiscal policy is the use of government revenue collection ( taxes or tax cuts) and expenditure to influence a country's economy. The use of government revenue expenditures to influence macroeconomic variabl ...
to support economic growth. The adjusted monetary base has increased from approximately $400 billion in 1994, to $800 billion in 2005, and to over $3 trillion in 2013. When the Federal Reserve makes a purchase, it credits the seller's reserve account (with the Federal Reserve). This money is not transferred from any existing funds—it is at this point that the Federal Reserve has created new high-powered money. Commercial banks then decide how much money to keep in deposit with the Federal Reserve and how much to hold as physical currency. In the latter case, the Federal Reserve places an order for printed money from the U.S. Treasury Department. The Treasury Department, in turn, sends these requests to the Bureau of Engraving and Printing (to print new dollar bills) and the Bureau of the Mint (to stamp the coins). The Federal Reserve's monetary policy objectives to keep prices stable and unemployment low is often called the ''dual mandate''. This replaces past practices under a
gold standard A gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold. The gold standard was the basis for the international monetary system from the 1870s to the early 1920s, and from th ...
where the main concern is the gold equivalent of the local currency, or under a gold exchange standard where the concern is fixing the exchange rate versus another gold-convertible currency (previously practiced worldwide under the
Bretton Woods Agreement The Bretton Woods system of monetary management established the rules for commercial and financial relations among the United States, Canada, Western European countries, Australia, and Japan after the 1944 Bretton Woods Agreement. The Bretto ...
of 1944 via fixed exchange rates to the U.S. dollar).


International use as reserve currency


Ascendancy

The primary currency used for global trade between
Europe Europe is a large peninsula conventionally considered a continent in its own right because of its great physical size and the weight of its history and traditions. Europe is also considered a subcontinent of Eurasia and it is located entire ...
,
Asia Asia (, ) is one of the world's most notable geographical regions, which is either considered a continent in its own right or a subcontinent of Eurasia, which shares the continental landmass of Afro-Eurasia with Africa. Asia covers an ...
, and
the Americas The Americas, which are sometimes collectively called America, are a landmass comprising the totality of North and South America. The Americas make up most of the land in Earth's Western Hemisphere and comprise the New World. Along with th ...
has historically been the Spanish-American silver dollar, which created a global
silver standard The silver standard is a monetary system in which the standard economic unit of account is a fixed weight of silver. Silver was far more widespread than gold as the monetary standard worldwide, from the Sumerians 3000 BC until 1873. Followin ...
system from the 16th to 19th centuries, due to abundant silver supplies in
Spanish America Spanish America refers to the Spanish territories in the Americas during the Spanish colonization of the Americas. The term "Spanish America" was specifically used during the territories' imperial era between 15th and 19th centuries. To the ...
. The U.S. dollar itself was derived from this coin. The
Spanish dollar The Spanish dollar, also known as the piece of eight ( es, Real de a ocho, , , or ), is a silver coin of approximately diameter worth eight Spanish reales. It was minted in the Spanish Empire following a monetary reform in 1497 with content ...
was later displaced by the British
pound sterling Sterling (abbreviation: stg; Other spelling styles, such as STG and Stg, are also seen. ISO code: GBP) is the currency of the United Kingdom and nine of its associated territories. The pound ( sign: £) is the main unit of sterling, and ...
in the advent of the international
gold standard A gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold. The gold standard was the basis for the international monetary system from the 1870s to the early 1920s, and from th ...
in the last quarter of the 19th century. The U.S. dollar began to displace the
pound sterling Sterling (abbreviation: stg; Other spelling styles, such as STG and Stg, are also seen. ISO code: GBP) is the currency of the United Kingdom and nine of its associated territories. The pound ( sign: £) is the main unit of sterling, and ...
as international
reserve currency A reserve currency (or anchor currency) is a foreign currency that is held in significant quantities by central banks or other monetary authorities as part of their foreign exchange reserves. The reserve currency can be used in international t ...
from the 1920s since it emerged from the
First World War World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fighti ...
relatively unscathed and since the
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territor ...
was a significant recipient of wartime gold inflows. After the U.S. emerged as an even stronger global
superpower A superpower is a state with a dominant position characterized by its extensive ability to exert influence or project power on a global scale. This is done through the combined means of economic, military, technological, political and cultural ...
during the
Second World War World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposi ...
, the
Bretton Woods Agreement The Bretton Woods system of monetary management established the rules for commercial and financial relations among the United States, Canada, Western European countries, Australia, and Japan after the 1944 Bretton Woods Agreement. The Bretto ...
of 1944 established the post-war international monetary system, with the U.S. dollar ascending to become the world's primary
reserve currency A reserve currency (or anchor currency) is a foreign currency that is held in significant quantities by central banks or other monetary authorities as part of their foreign exchange reserves. The reserve currency can be used in international t ...
for international trade, and the only post-war currency linked to gold at $35 per
troy ounce Troy weight is a system of units of mass that originated in 15th-century England, and is primarily used in the precious metals industry. The troy weight units are the grain, the pennyweight (24 grains), the troy ounce (20 pennyweights), an ...
.


As international reserve currency

The U.S. dollar is joined by the world's other major currencies - the
euro The euro ( symbol: €; code: EUR) is the official currency of 19 out of the member states of the European Union (EU). This group of states is known as the eurozone or, officially, the euro area, and includes about 340 million citize ...
,
pound sterling Sterling (abbreviation: stg; Other spelling styles, such as STG and Stg, are also seen. ISO code: GBP) is the currency of the United Kingdom and nine of its associated territories. The pound ( sign: £) is the main unit of sterling, and ...
,
Japanese yen The is the official currency of Japan. It is the third-most traded currency in the foreign exchange market, after the United States dollar (US$) and the euro. It is also widely used as a third reserve currency after the US dollar and the e ...
and Chinese
renminbi The renminbi (; symbol: ¥; ISO code: CNY; abbreviation: RMB) is the official currency of the People's Republic of China and one of the world's most traded currencies, ranking as the fifth most traded currency in the world as of April 202 ...
- in the currency basket of the
special drawing rights Special drawing rights (SDRs, code ) are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund (IMF). SDRs are units of account for the IMF, and not a currency ''per se''. They represent a claim ...
of the
International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster gl ...
. Central banks worldwide have huge reserves of U.S. dollars in their holdings and are significant buyers of U.S. treasury bills and notes. Foreign companies, entities, and private individuals hold U.S. dollars in foreign deposit accounts called
eurodollar Eurodollars are U.S. dollars held in time deposit accounts in banks outside the United States, which thus are not subject to the legal jurisdiction of the U.S. Federal Reserve. Consequently, such deposits are subject to much less regulation th ...
s (not to be confused with the
euro The euro ( symbol: €; code: EUR) is the official currency of 19 out of the member states of the European Union (EU). This group of states is known as the eurozone or, officially, the euro area, and includes about 340 million citize ...
), which are outside the jurisdiction of the
Federal Reserve System The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after ...
. Private individuals also hold dollars outside the banking system mostly in the form of US$100 bills, of which 80% of its supply is held overseas. The
United States Department of the Treasury The Department of the Treasury (USDT) is the national treasury and finance department of the federal government of the United States, where it serves as an executive department. The department oversees the Bureau of Engraving and Printing an ...
exercises considerable oversight over the SWIFT financial transfers network, and consequently has a huge sway on the global
financial transaction A financial transaction is an agreement, or communication, between a buyer and seller to exchange goods, services, or assets for payment. Any transaction involves a change in the status of the finances of two or more businesses or individuals ...
s systems, with the ability to impose sanctions on foreign entities and individuals.


In the global markets

The U.S. dollar is predominantly the standard currency unit in which goods are quoted and traded, and with which payments are settled in, in the global commodity markets. The U.S. Dollar Index is an important indicator of the dollar's strength or weakness versus a basket of six foreign currencies. The
United States Government The federal government of the United States (U.S. federal government or U.S. government) is the national government of the United States, a federal republic located primarily in North America, composed of 50 states, a city within a fed ...
is capable of borrowing trillions of dollars from the global capital markets in U.S. dollars issued by the
Federal Reserve The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after ...
, which is itself under U.S. government purview, at minimal interest rates, and with virtually zero default risk. In contrast, foreign governments and corporations incapable of raising money in their own local currencies are forced to issue debt denominated in U.S. dollars, along with its consequent higher interest rates and risks of default. The United States's ability to borrow in its own currency without facing a significant balance of payments crisis has been frequently described as its exorbitant privilege. A frequent topic of debate is whether the strong dollar policy of the United States is indeed in America's own best interests, as well as in the best interest of the
international community The international community is an imprecise phrase used in geopolitics and international relations to refer to a broad group of people and governments of the world. As a rhetorical term Aside from its use as a general descriptor, the term is ...
.


Currencies fixed to the U.S. dollar

For a more exhaustive discussion of countries using the U.S. dollar as official or customary currency, or using currencies which are pegged to the U.S. dollar, see '' International use of the U.S. dollar#Dollarization and fixed exchange rates'' and '' Currency substitution#US dollar''. Countries using the U.S. dollar as their official currency include: * In the Americas:
Panama Panama ( , ; es, link=no, Panamá ), officially the Republic of Panama ( es, República de Panamá), is a transcontinental country spanning the southern part of North America and the northern part of South America. It is bordered by Co ...
,
Ecuador Ecuador ( ; ; Quechua: ''Ikwayur''; Shuar: ''Ecuador'' or ''Ekuatur''), officially the Republic of Ecuador ( es, República del Ecuador, which literally translates as "Republic of the Equator"; Quechua: ''Ikwadur Ripuwlika''; Shuar: '' ...
,
El Salvador El Salvador (; , meaning " The Saviour"), officially the Republic of El Salvador ( es, República de El Salvador), is a country in Central America. It is bordered on the northeast by Honduras, on the northwest by Guatemala, and on the south b ...
,
British Virgin Islands ) , anthem = " God Save the King" , song_type = Territorial song , song = " Oh, Beautiful Virgin Islands" , image_map = File:British Virgin Islands on the globe (Americas centered).svg , map_caption = , mapsize = 290px , image_map2 = Br ...
,
Turks and Caicos Islands The Turks and Caicos Islands (abbreviated TCI; and ) are a British Overseas Territory consisting of the larger Caicos Islands and smaller Turks Islands, two groups of tropical islands in the Lucayan Archipelago of the Atlantic Ocean and n ...
, and the
Caribbean Netherlands ) , image_map = BES islands location map.svg , map_caption = Location of the Caribbean Netherlands (green and circled). From left to right: Bonaire, Saba, and Sint Eustatius , elevation_max_m = 887 , elevation_max_footnotes = , demographic ...
. * The constituent states of the former
Trust Territory of the Pacific Islands The Trust Territory of the Pacific Islands (TTPI) was a United Nations trust territory in Micronesia administered by the United States from 1947 to 1994. History Spain initially claimed the islands that later composed the territory of the Tru ...
:
Palau Palau,, officially the Republic of Palau and historically ''Belau'', ''Palaos'' or ''Pelew'', is an island country and microstate in the western Pacific. The nation has approximately 340 islands and connects the western chain of the ...
, the
Federated States of Micronesia The Federated States of Micronesia (; abbreviated FSM) is an island country in Oceania. It consists of four states from west to east, Yap, Chuuk, Pohnpei and Kosraethat are spread across the western Pacific. Together, the states compri ...
, and the
Marshall Islands The Marshall Islands ( mh, Ṃajeḷ), officially the Republic of the Marshall Islands ( mh, Aolepān Aorōkin Ṃajeḷ),'' () is an independent island country and microstate near the Equator in the Pacific Ocean, slightly west of the Internat ...
. * Others:
East Timor East Timor (), also known as Timor-Leste (), officially the Democratic Republic of Timor-Leste, is an island country in Southeast Asia. It comprises the eastern half of the island of Timor, the exclave of Oecusse on the island's north-we ...
. Among the countries using the U.S. dollar together with other foreign currencies and their local currency are
Cambodia Cambodia (; also Kampuchea ; km, កម្ពុជា, UNGEGN: ), officially the Kingdom of Cambodia, is a country located in the southern portion of the Indochinese Peninsula in Southeast Asia, spanning an area of , bordered by Thailan ...
and
Zimbabwe Zimbabwe (), officially the Republic of Zimbabwe, is a landlocked country located in Southeast Africa, between the Zambezi and Limpopo Rivers, bordered by South Africa to the south, Botswana to the south-west, Zambia to the north, and ...
. Currencies pegged to the U.S. dollar include: * In the Caribbean: the
Bahamian dollar The dollar ( sign: $; code: BSD) has been the currency of The Bahamas since 1966. It is normally abbreviated with the dollar sign ''$'', or alternatively B$ to distinguish it from other dollar-denominated currencies. It is divided into 100 cen ...
,
Barbadian dollar The dollar has been the currency of Barbados since 1935. Globally its currency has the ISO 4217 code ''BBD'', however, unofficially in Barbados the International vehicle registration code code BDS is also commonly used, a currency code that is ...
,
Belize dollar The Belize dollar is the official currency in Belize ( currency code ''BZD''). It is normally abbreviated with the dollar sign ''$'', or alternatively ''BZ$'' to distinguish it from other dollar-denominated currencies. It is divided into 100 c ...
, Bermudan dollar,
Cayman Islands dollar The Cayman Islands Dollar ( currency code ''KYD'') is the currency of the Cayman Islands. It is abbreviated with the dollar sign ''$'', or alternatively ''CI$'' to distinguish it from other dollar-denominated currencies. It is subdivided into ...
,
East Caribbean dollar The Eastern Caribbean dollar (symbol: EC$; code: XCD) is the currency of all seven full members and one associate member of the Organisation of Eastern Caribbean States (OECS). The successor to the British West Indies dollar, it has existed sin ...
, Netherlands Antillean guilder and the
Aruban florin The florin (; sign: Afl.; code: AWG) or Aruban guilder is the currency of Aruba. It is subdivided into 100 cents. The florin was introduced in 1986, replacing the Netherlands Antillean guilder at par. The Aruban florin is pegged to the United Sta ...
. * The currencies of five oil-producing Arab countries: the
Saudi riyal The Saudi riyal ( ar, ريال سعودي ') is the currency of Saudi Arabia. It is abbreviated as or SAR ''(Saudi Arabian Riyal)''. It is subdivided into 100 halalas ( ar, هللة '). The currency is pegged to the US dollar at a constant rate ...
,
United Arab Emirates dirham The dirham (; ar, درهم إماراتي, abbreviation: د.إ in Arabic, Dh (singular) and Dhs (plural) or DH in Latin; ISO code: AED) is the official currency of the United Arab Emirates. The dirham is subdivided into 100 . History The n ...
, Omani rial,
Qatari riyal The Qatari riyal (sign: QR in Latin, in Arabic; ISO code: QAR) is the currency of the State of Qatar. It is divided into 100 dirhams ( ar, درهم). History Until 1966, Qatar used the Indian rupee as its currency, in the form of Gulf rupees. ...
and the Bahraini dinar. * Others: the
Hong Kong dollar The Hong Kong dollar (, sign: HK$; code: HKD) is the official currency of the Hong Kong Special Administrative Region. It is subdivided into 100 cents or 1000 mils. The Hong Kong Monetary Authority is the monetary authority of Hong Kong ...
, Macanese pataca,
Jordanian dinar The Jordanian dinar ( ar, دينار أردني; code: JOD; unofficially abbreviated as JD) has been the currency of Jordan since 1950. The dinar is divided into 10 dirhams, 100 qirsh (also called piastres) or 1000 fulus. It is pegged to the U ...
,
Lebanese pound The pound or lira ( ar, ليرة لبنانية ''līra Libnāniyya''; French: ''livre libanaise''; abbreviation: LL in Latin, in Arabic, historically also £L, ISO code: LBP) is the currency of Lebanon. It was formerly divided into 100 pias ...
.


Value

The 6th paragraph of Section 8 of Article 1 of the U.S. Constitution provides that the U.S. Congress shall have the power to "coin money" and to "regulate the value" of domestic and foreign coins. Congress exercised those powers when it enacted the Coinage Act of 1792. That Act provided for the minting of the first U.S. dollar and it declared that the U.S. dollar shall have "the value of a Spanish milled dollar as the same is now current". The table above shows the equivalent amount of goods that, in a particular year, could be purchased with $1. The table shows that from 1774 through 2012 the U.S. dollar has lost about 97.0% of its buying power. The decline in the value of the U.S. dollar corresponds to price inflation, which is a rise in the general level of prices of goods and services in an economy over a period of time. A
consumer price index A consumer price index (CPI) is a price index, the price of a weighted average market basket of consumer goods and services purchased by households. Changes in measured CPI track changes in prices over time. Overview A CPI is a statist ...
(CPI) is a measure estimating the average price of consumer goods and services purchased by households. The United States Consumer Price Index, published by the
Bureau of Labor Statistics The Bureau of Labor Statistics (BLS) is a unit of the United States Department of Labor. It is the principal fact-finding agency for the U.S. government in the broad field of labor economics and statistics and serves as a principal agency of ...
, is a measure estimating the average price of consumer goods and services in the United States. It reflects inflation as experienced by consumers in their day-to-day living expenses. A graph showing the U.S. CPI relative to 1982–1984 and the annual year-over-year change in CPI is shown at right. The value of the U.S. dollar declined significantly during wartime, especially during the
American Civil War The American Civil War (April 12, 1861 – May 26, 1865; also known by other names) was a civil war in the United States. It was fought between the Union ("the North") and the Confederacy ("the South"), the latter formed by state ...
, World War I, and World War II. The
Federal Reserve The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after ...
, which was established in 1913, was designed to furnish an "elastic" currency subject to "substantial changes of quantity over short periods", which differed significantly from previous forms of high-powered money such as gold, national banknotes, and silver coins. Over the very long run, the prior gold standard kept prices stable—for instance, the price level and the value of the U.S. dollar in 1914 were not very different from the price level in the 1880s. The Federal Reserve initially succeeded in maintaining the value of the U.S. dollar and price stability, reversing the inflation caused by the First World War and stabilizing the value of the dollar during the 1920s, before presiding over a 30% deflation in U.S. prices in the 1930s. Under the
Bretton Woods system The Bretton Woods system of monetary management established the rules for commercial and financial relations among the United States, Canada, Western European countries, Australia, and Japan after the 1944 Bretton Woods Agreement. The Bretto ...
established after World War II, the value of gold was fixed to $35 per ounce, and the value of the U.S. dollar was thus anchored to the value of gold. Rising government spending in the 1960s, however, led to doubts about the ability of the United States to maintain this convertibility, gold stocks dwindled as banks and international investors began to convert dollars to gold, and as a result, the value of the dollar began to decline. Facing an emerging
currency crisis A currency crisis is a type of financial crisis, and is often associated with a real economic crisis. A currency crisis raises the probability of a banking crisis or a default crisis. During a currency crisis the value of foreign denominated de ...
and the imminent danger that the United States would no longer be able to redeem dollars for gold, gold convertibility was finally terminated in 1971 by President Nixon, resulting in the " Nixon shock". The value of the U.S. dollar was therefore no longer anchored to gold, and it fell upon the Federal Reserve to maintain the value of the U.S. currency. The Federal Reserve, however, continued to increase the money supply, resulting in
stagflation In economics, stagflation or recession-inflation is a situation in which the inflation rate is high or increasing, the economic growth rate slows, and unemployment remains steadily high. It presents a dilemma for economic policy, since actio ...
and a rapidly declining value of the U.S. dollar in the 1970s. This was largely due to the prevailing economic view at the time that inflation and real economic growth were linked (the
Phillips curve The Phillips curve is an economic model, named after William Phillips hypothesizing a correlation between reduction in unemployment and increased rates of wage rises within an economy. While Phillips himself did not state a linked relationshi ...
), and so inflation was regarded as relatively benign. Between 1965 and 1981, the U.S. dollar lost two thirds of its value. In 1979, President Carter appointed Paul Volcker
Chairman of the Federal Reserve The chair of the Board of Governors of the Federal Reserve System is the head of the Federal Reserve, and is the active executive officer of the Board of Governors of the Federal Reserve System. The chair shall preside at the meetings of the Boa ...
. The Federal Reserve tightened the money supply and inflation was substantially lower in the 1980s, and hence the value of the U.S. dollar stabilized. Over the thirty-year period from 1981 to 2009, the U.S. dollar lost over half its value. This is because the Federal Reserve has targeted not zero inflation, but a low, stable rate of inflation—between 1987 and 1997, the rate of inflation was approximately 3.5%, and between 1997 and 2007 it was approximately 2%. The so-called " Great Moderation" of economic conditions since the 1970s is credited to monetary policy targeting price stability. There is an ongoing debate about whether central banks should target zero inflation (which would mean a constant value for the U.S. dollar over time) or low, stable inflation (which would mean a continuously but slowly declining value of the dollar over time, as is the case now). Although some economists are in favor of a zero inflation policy and therefore a constant value for the U.S. dollar, others contend that such a policy limits the ability of the central bank to control
interest rates An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, th ...
and stimulate the economy when needed.


Pegged currencies

*
Aruban florin The florin (; sign: Afl.; code: AWG) or Aruban guilder is the currency of Aruba. It is subdivided into 100 cents. The florin was introduced in 1986, replacing the Netherlands Antillean guilder at par. The Aruban florin is pegged to the United Sta ...
*
Bahamian dollar The dollar ( sign: $; code: BSD) has been the currency of The Bahamas since 1966. It is normally abbreviated with the dollar sign ''$'', or alternatively B$ to distinguish it from other dollar-denominated currencies. It is divided into 100 cen ...
(at par) * Bahraini dinar (higher value) *
Barbadian dollar The dollar has been the currency of Barbados since 1935. Globally its currency has the ISO 4217 code ''BBD'', however, unofficially in Barbados the International vehicle registration code code BDS is also commonly used, a currency code that is ...
*
Belarusian ruble The ruble ( be, рубель ''rubeĺ’''; Abbreviation: Rbl (plural: Rbls); ISO code: BYN) is the currency of Belarus. It is also known as the rubel, or in Commonwealth English as the rouble. The ruble is subdivided into 100 copecks (somet ...
(alongside Euro and Russian Ruble in currency basket) *
Belize dollar The Belize dollar is the official currency in Belize ( currency code ''BZD''). It is normally abbreviated with the dollar sign ''$'', or alternatively ''BZ$'' to distinguish it from other dollar-denominated currencies. It is divided into 100 c ...
*
Bermudian dollar The Bermudian dollar (symbol: $; code: BMD; also abbreviated BD$; informally called the Bermuda dollar) is the official currency of the British Overseas Territory of Bermuda. It is subdivided into 100  cents. The Bermudian dollar is not ...
(at par) *
Cayman Islands dollar The Cayman Islands Dollar ( currency code ''KYD'') is the currency of the Cayman Islands. It is abbreviated with the dollar sign ''$'', or alternatively ''CI$'' to distinguish it from other dollar-denominated currencies. It is subdivided into ...
(higher value) * Costa Rican colon *
Cuban peso The Cuban peso (in Spanish , ISO 4217 code: CUP) also known as , is the official currency of Cuba. The Cuban peso historically circulated at par with the Spanish-American silver dollar from the 16th to 19th centuries, and then at par with the ...
*
East Caribbean Dollar The Eastern Caribbean dollar (symbol: EC$; code: XCD) is the currency of all seven full members and one associate member of the Organisation of Eastern Caribbean States (OECS). The successor to the British West Indies dollar, it has existed sin ...
* East Timor centavo coins (at par) *
Ecuadorian centavo coins Ecuadorian centavo coins were introduced in 2000 when Ecuador converted its currency from the sucre to the U.S. dollar. The coins are in denominations of 1, 5, 10, 25 and 50 centavos and are identical in size and value to their U.S. cent counte ...
(at par) * Salvadoran colon *
Eritrean nakfa The nakfa (ISO 4217 code: ''ERN''; ''naḳfa'', or or نقفة ''nākfā'') is the currency of Eritrea and was introduced on 15 November 1998 to replace the Ethiopian birr at par. The currency takes its name from the Eritrean town of Nakfa, si ...
*
Guatemalan quetzal The quetzal (; code: GTQ) is the currency of Guatemala, named after the national bird of Guatemala, the resplendent quetzal. In ancient Mayan culture, the quetzal bird's tail feathers were used as currency. It is divided into 100 ''centavos,'' o ...
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Haitian gourde The gourde () or goud () is the currency of Haiti. Its ISO 4217 code is HTG and it is divided into 100 ''centimes'' (French) or ''santim'' (Creole). The word "gourde" is a French cognate for the Spanish term "gordo", from the "pesos gordos" ( ...
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Honduran lempira The lempira (, sign: L, ISO 4217 code: HNL;) is the currency of Honduras. It is subdivided into 100 centavos. Etymology The lempira was named after the 16th-century ''cacique'' Lempira, a ruler of the indigenous Lenca people, who is renow ...
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Hong Kong dollar The Hong Kong dollar (, sign: HK$; code: HKD) is the official currency of the Hong Kong Special Administrative Region. It is subdivided into 100 cents or 1000 mils. The Hong Kong Monetary Authority is the monetary authority of Hong Kong ...
(narrow band) *
Iraqi dinar The Iraqi dinar () (Arabic: دينار; sign: ID in Latin, د.ع in Arabic; code: IQD) is the currency of Iraq. It is issued by the Central Bank of Iraq and is subdivided into 1,000 fils (فلس), although inflation has rendered the fils obsol ...
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Jordanian dinar The Jordanian dinar ( ar, دينار أردني; code: JOD; unofficially abbreviated as JD) has been the currency of Jordan since 1950. The dinar is divided into 10 dirhams, 100 qirsh (also called piastres) or 1000 fulus. It is pegged to the U ...
(higher value) *
Kuwaiti dinar The Kuwaiti dinar ( ar, دينار كويتي, code: KWD) is the currency of Kuwait. It is sub-divided into 1,000 fils. As of 2022, the Kuwaiti dinar is the currency with the highest value per base unit, with KD 1 equalling US$3.32, ahe ...
(higher value) *
Lebanese pound The pound or lira ( ar, ليرة لبنانية ''līra Libnāniyya''; French: ''livre libanaise''; abbreviation: LL in Latin, in Arabic, historically also £L, ISO code: LBP) is the currency of Lebanon. It was formerly divided into 100 pias ...
* Antillean guilder * Nicaraguan cordoba *
Nigerian naira The naira ( sign: ₦; code: NGN) is the currency of Nigeria. One naira is divided into 100 ''kobo''. The Central Bank of Nigeria (CBN) is the sole issuer of legal tender money throughout the Federal Republic of Nigeria. It controls the volu ...
* Omani rial (higher value) * Panamanian balboa (at par) *
Qatari riyal The Qatari riyal (sign: QR in Latin, in Arabic; ISO code: QAR) is the currency of the State of Qatar. It is divided into 100 dirhams ( ar, درهم). History Until 1966, Qatar used the Indian rupee as its currency, in the form of Gulf rupees. ...
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Saudi riyal The Saudi riyal ( ar, ريال سعودي ') is the currency of Saudi Arabia. It is abbreviated as or SAR ''(Saudi Arabian Riyal)''. It is subdivided into 100 halalas ( ar, هللة '). The currency is pegged to the US dollar at a constant rate ...
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Sierra Leonean leone The leone is the currency of Sierra Leone. It is subdivided into 100 ''cents''. As of 1 July 2022, the ISO 4217 code is ''SLE'' due to a redenomination of the old leone (SLL) at a rate of SLL 1000 to SLE 1. The leone is abbreviated as ''Le'' pla ...
* Trinidad and Tobago dollar *
United Arab Emirates dirham The dirham (; ar, درهم إماراتي, abbreviation: د.إ in Arabic, Dh (singular) and Dhs (plural) or DH in Latin; ISO code: AED) is the official currency of the United Arab Emirates. The dirham is subdivided into 100 . History The n ...
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Yemeni rial The rial ( ar, wikt:rial, ريال يمني; Currency symbol, sign: ﷼; abbreviation: YRl (singular) and YRls (plural) in Latin alphabet, Latin, ,ر.ي in Arabic script, Arabic; ISO 4217, ISO code: YER) is the official currency of the Republic o ...
(lower value) * Zimbabwean bond coins and bond notes (at par)


Exchange rates


Historical exchange rates


Current exchange rates


See also

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Counterfeit United States currency Counterfeiting of the currency of the United States is widely attempted. According to the United States Department of Treasury, an estimated $70 million in counterfeit bills are in circulation, or approximately 1 note in counterfeits for e ...
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Dedollarisation Dedollarisation is a process of substituting US dollar as the currency used for (i) trading oil and/ or other commodities (i.e. petrodollar), (ii) buying US dollars for the forex reserves, (iii) bilateral trade agreements, and (iv) dollar-denomi ...
* International use of the U.S. dollar *
List of the largest trading partners of the United States The 30 largest trade partners of the United States represent 87.9% of U.S. exports, and 87.4% of U.S. imports . These figures do not include services or foreign direct investment. The largest US partners with their total trade in goods (sum of im ...
* Monetary policy of the United States * Petrodollar recycling * Strong dollar policy * U.S. Dollar Index


Notes


References


Further reading

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External links


U.S. Bureau of Engraving and Printing



American Currency Exhibit at the San Francisco Federal Reserve Bank

Relative values of the U.S. dollar, from 1774 to present



Summary of BEP Production Statistics


Images of U.S. currency and coins


U.S. Currency Education Program page with images of all current banknotes

U.S. Mint: Image Library


{{DEFAULTSORT:United States Dollar Currencies introduced in 1792 Currencies of British Overseas Territories Currencies of East Timor
Dollar Dollar is the name of more than 20 currencies. They include the Australian dollar, Brunei dollar, Canadian dollar, Hong Kong dollar, Jamaican dollar, Liberian dollar, Namibian dollar, New Taiwan dollar, New Zealand dollar, Singapore dollar, ...
Currencies of El Salvador Currencies of the Kingdom of the Netherlands
Dollar Dollar is the name of more than 20 currencies. They include the Australian dollar, Brunei dollar, Canadian dollar, Hong Kong dollar, Jamaican dollar, Liberian dollar, Namibian dollar, New Taiwan dollar, New Zealand dollar, Singapore dollar, ...
Currencies of Zimbabwe Historical currencies of the United States 1792 establishments in the United States