The pound sterling known as the pound and less referred to as sterling, is the official currency of the United Kingdom, Guernsey, the Isle of Man, South Georgia and the South Sandwich Islands, the British Antarctic Territory, Tristan da Cunha. It is subdivided into 100 pence. A number of nations that do not use sterling have currencies called the pound. Sterling is the third most-traded currency in the foreign exchange market, after the United States dollar, the euro. Together with those two currencies and the Chinese yuan, it forms the basket of currencies which calculate the value of IMF special drawing rights. Sterling is the third most-held reserve currency in global reserves; the British Crown dependencies of Guernsey and the Isle of Man produce their own local issues of sterling which are considered equivalent to UK sterling in their respective regions. The pound sterling is used in Gibraltar, the Falkland Islands, Saint Helena and Ascension Island in Saint Helena and Tristan da Cunha; the Bank of England is the central bank for the pound sterling, issuing its own coins and banknotes, regulating issuance of banknotes by private banks in Scotland and Northern Ireland.
Banknotes issued by other jurisdictions are not regulated by the Bank of England. The full official name pound sterling, is used in formal contexts and when it is necessary to distinguish the United Kingdom currency from other currencies with the same name. Otherwise the term pound is used; the currency name is sometimes abbreviated to just sterling in the wholesale financial markets, but not when referring to specific amounts. The abbreviations "ster." and "stg." are sometimes used. The term "British pound" is sometimes incorrectly used in less formal contexts, it is not an official name of the currency; the exchange rate of the pound sterling against the US dollar is referred to as "cable" in the wholesale foreign exchange markets. The origins of this term are attributed to the fact that in the 1800s, the GBP/USD exchange rate was transmitted via transatlantic cable. Forex traders of GBP/USD are sometimes referred to as "cable dealers". GBP/USD is now the only currency pair with its own name in the foreign exchange markets, after IEP/USD, known as "wire" in the forward FX markets, no longer exists after the Irish Pound was replaced by the euro in 1999.
There is apparent convergence of opinion regarding the origin of the term "pound sterling", toward its derivation from the name of a small Norman silver coin, away from its association with Easterlings or other etymologies. Hence, the Oxford English Dictionary state that the "most plausible" etymology is derivation from the Old English steorra for "star" with the added diminutive suffix "-ling", to mean "little star" and to refer to a silver penny of the English Normans; as another established source notes, the compound expression was derived: However, the perceived narrow window of the issuance of this coin, the fact that coin designs changed in the period in question, led Philip Grierson to reject this in favour of a more complex theory. Another argument that the Hanseatic League was the origin for both the origin of its definition and manufacture, in its name is that the German name for the Baltic is "Ost See", or "East Sea", from this the Baltic merchants were called "Osterlings", or "Easterlings".
In 1260, Henry III granted them a charter of protection and land for their Kontor, the Steelyard of London, which by the 1340s was called "Easterlings Hall", or Esterlingeshalle. Because the League's money was not debased like that of England, English traders stipulated to be paid in pounds of the "Easterlings", contracted to "'sterling". For further discussion of the etymology of "sterling", see sterling silver; the currency sign for the pound is £, written with a single cross-bar, though a version with a double cross-bar is sometimes seen. This symbol derives from medieval Latin documents; the ISO 4217 currency code is GBP, formed from "GB", the ISO 3166-1 alpha-2 code for the United Kingdom, the first letter of "pound". It does not stand for "Great Britain Pound" or "Great British Pound"; the abbreviation "UKP" is used but this is non-standard because the ISO 3166 country code for the United Kingdom is GB. The Crown dependencies use their own codes: GGP, JEP and IMP. Stocks are traded in pence, so traders may refer to pence sterling, GBX, when listing stock prices.
A common slang term for the pound sterling or pound is quid, singular and plural, except in the common phrase "quids in!". The term may have come via Italian immigrants from "scudo", the name for a number of coins used in Italy until the 19th century.
British West Indies
The British West Indies, sometimes abbreviated to the BWI, is a collective term for the British territories in the Caribbean: Anguilla, the Cayman Islands and Caicos Islands, the British Virgin Islands, The Bahamas, Belize and Barbuda, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Guyana and Trinidad and Tobago. Before the decolonization period in the 1950's and 1960's it included all British colonies in the region, together with two mainland colonies, as part of the British Empire. In 1912, the British West Indies were divided into different colonies: The Bahamas, Guiana, British Honduras, Jamaica and Tobago, the Windward Islands, the Leeward Islands. Between 1958 and 1962, all of the island territories except the British Virgin Islands and the Bahamas were organised into the West Indies Federation, which did not include the mainland colonies of British Honduras and British Guiana, it was hoped that the Federation would become independent as a single nation, but it had limited powers, many practical problems, a lack of popular support.
The West Indies Federation was dissolved in 1962. Most of the historic British territories, including all of the larger ones, are now independent as separate countries, with membership in various international bodies, such as the Organization of American States, the Association of Caribbean States, the World Trade Organization, the United Nations, the Caribbean Community, the Commonwealth of Nations and the Caribbean Development Bank among others; the remainder are British overseas territories. The territories that were part of the British West Indies are: The Bahamas Barbados Belize Bermuda British Leeward Islands Anguilla Antigua and Barbuda British Virgin Islands Dominica Montserrat Saint Kitts and Nevis British Windward Islands Grenada Saint Lucia Saint Vincent and the Grenadines Cayman Islands Guyana Jamaica Trinidad and Tobago Turks and Caicos Islands Sir William Stapleton established the first federation in the British West Indies in 1674, he set up a General Assembly of the Leeward Islands in St. Kitts.
Stapleton's Federation was active between 1674 and 1685, during his term as governor, the General Assembly met until 1711. By the 18th century, each island had made its own laws; the islands continued to share one Attorney-General. Although unpopular, Stapleton's Federation was never dissolved but replaced by other arrangements. Between 1816 and 1833, the Leewards were divided into two groups: St. Christopher-Nevis-Anguilla and Antigua-Barbuda-Montserrat, each with its own Governor. In 1833 all the Leeward Islands were brought together, Dominica was added, remaining as part of the group until 1940. In 1869, Governor Benjamin Pine was assigned to organise a federation of Antigua-Barbuda, Montserrat, Nevis, St. Kitts and the British Virgin Islands. St. Kitts and Nevis opposed sharing their government funds with Antigua and Montserrat, which were bankrupt. Governor Pine told the Colonial Office that the scheme had failed due to "local prejudice and self-interest", his only achievement was to give the Leewards a single Governor.
All laws and ordinances, had to be approved by each island council. In 1871 the British government passed the Leeward Islands Act, by which all the islands were under one Governor and one set of laws; the Federal Colony was composed of all islands organised under Governor Pine's previous attempt. Each island was called a "Presidency" under Commissioner. Like earlier groupings, this federation was unpopular but it continued until 1956, when it was redefined as the Territory of the Leeward Islands. In 1958 the Federation of the West Indies was organised. In 1833 the Windward Islands became. In 1838, Trinidad and St. Lucia were brought into the Windward Islands Colony, but were not given their own assemblies. In 1840 Trinidad left the Colony; the Windward Islands Colony was unpopular: Barbados wished to retain its separate identity and ancient institutions, the other colonies did not want to associate with it. The individual islands resisted British attempts at closer union. Barbados in particular fought to retain its own Assembly and left the union in 1884.
Power for the union was transferred to Grenada as overseer of the bloc. From 1885 to 1958, the Windward Islands Colony included Grenada and the Grenadines, St. Vincent and St. Lucia during the entire period. Tobago left in 1889. Dominica joined the Windward Islands Colony in 1940, after having been transferred from the Leewards, remained in the Colony until 1958. After 1885 the Windward Islands Colony was under one Governor-General in Grenada, each island had its own Lieutenant-Governor and its own assembly. Attempts to create a Federal Colony, as in the Leewards, were always resisted; the Windward Isl
Bretton Woods system
The Bretton Woods system of monetary management established the rules for commercial and financial relations among the United States, Western European countries and Japan after the 1944 Bretton Woods Agreement. The Bretton Woods system was the first example of a negotiated monetary order intended to govern monetary relations among independent states; the chief features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained its external exchange rates within 1 percent by tying its currency to gold and the ability of the IMF to bridge temporary imbalances of payments. There was a need to address the lack of cooperation among other countries and to prevent competitive devaluation of the currencies as well. Preparing to rebuild the international economic system while World War II was still raging, 730 delegates from all 44 Allied nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire, United States, for the United Nations Monetary and Financial Conference known as the Bretton Woods Conference.
The delegates deliberated during 1–22 July 1944, signed the Bretton Woods agreement on its final day. Setting up a system of rules and procedures to regulate the international monetary system, these accords established the International Monetary Fund and the International Bank for Reconstruction and Development, which today is part of the World Bank Group; the United States, which controlled two thirds of the world's gold, insisted that the Bretton Woods system rest on both gold and the US dollar. Soviet representatives attended the conference but declined to ratify the final agreements, charging that the institutions they had created were "branches of Wall Street"; these organizations became operational in 1945 after a sufficient number of countries had ratified the agreement. On 15 August 1971, the United States unilaterally terminated convertibility of the US dollar to gold bringing the Bretton Woods system to an end and rendering the dollar a fiat currency; this action, referred to as the Nixon shock, created the situation in which the U.
S. dollar became a reserve currency used by many states. At the same time, many fixed currencies became free-floating; the political basis for the Bretton Woods system was in the confluence of two key conditions: the shared experiences of two World Wars, with the sense that failure to deal with economic problems after the first war had led to the second. There was a high level of agreement among the powerful nations that failure to coordinate exchange rates during the interwar period had exacerbated political tensions; this facilitated. Furthermore, all the participating governments at Bretton Woods agreed that the monetary chaos of the interwar period had yielded several valuable lessons; the experience of World War II was fresh in the minds of public officials. The planners at Bretton Woods hoped to avoid a repeat of the Treaty of Versailles after World War I, which had created enough economic and political tension to lead to WWII. After World War I, Britain owed the U. S. substantial sums, which Britain could not repay because it had used the funds to support allies such as France during the War.
S. The solution at Versailles for the French and Americans seemed to entail charging Germany for the debts. If the demands on Germany were unrealistic it was unrealistic for France to pay back Britain, for Britain to pay back the US. Thus, many "assets" on bank balance sheets internationally were unrecoverable loans, which culminated in the 1931 banking crisis. Intransigent insistence by creditor nations for the repayment of Allied war debts and reparations, combined with an inclination to isolationism, led to a breakdown of the international financial system and a worldwide economic depression; the so-called "beggar thy neighbor" policies that emerged as the crisis continued saw some trading nations using currency devaluations in an attempt to increase their competitiveness, though recent research suggests this de facto inflationary policy offset some of the contractionary forces in world price levels. In the 1920s, international flows of speculative financial capital increased, leading to extremes in balance of payments situations in various European countries and the US.
In the 1930s, world markets never broke through the barriers and restrictions on international trade and investment volume – barriers haphazardly constructed, nationally motivated and imposed. The various anarchic and autarkic protectionist and neo-mercantilist national policies – mutually inconsistent – that emerged over the first half of the decade worked inconsistently and self-defeatingly to promote national import substitution, increase national exports, divert foreign investment and trade flows, prevent certain categories of cross-border trade and investment outright. Global central bankers attempted to manage the situation by meeting with each other, but their understanding of the situation as well as difficulties in communicating internationally, hindered their abilities; the lesson was that having responsible, hard-working central bankers was not enough. Britain in the 1930s had an exclusionary trading bloc with nations of the British Empire known as the "Sterling Area". If Britain imported more than it exported to nations such as South Africa, South African recipients of pounds sterling tended to put them into London banks.
This meant that th
A central bank, reserve bank, or monetary authority is the institution that manages the currency, money supply, interest rates of a state or formal monetary union, oversees their commercial banking system. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the monetary base in the state, generally controls the printing/coining of the national currency, which serves as the state's legal tender. A central bank acts as a lender of last resort to the banking sector during times of financial crisis. Most central banks have supervisory and regulatory powers to ensure the solvency of member institutions, to prevent bank runs, to discourage reckless or fraudulent behavior by member banks. Central banks in most developed nations are institutionally independent from political interference. Still, limited control by the executive and legislative bodies exists. Functions of a central bank may include: implementing monetary policies. Setting the official interest rate – used to manage both inflation and the country's exchange rate – and ensuring that this rate takes effect via a variety of policy mechanisms controlling the nation's entire money supply the Government's banker and the bankers' bank managing the country's foreign exchange and gold reserves and the Government bonds regulating and supervising the banking industry Central banks implement a country's chosen monetary policy.
At the most basic level, monetary policy involves establishing what form of currency the country may have, whether a fiat currency, gold-backed currency, currency board or a currency union. When a country has its own national currency, this involves the issue of some form of standardized currency, a form of promissory note: a promise to exchange the note for "money" under certain circumstances; this was a promise to exchange the money for precious metals in some fixed amount. Now, when many currencies are fiat money, the "promise to pay" consists of the promise to accept that currency to pay for taxes. A central bank may use another country's currency either directly in a currency union, or indirectly on a currency board. In the latter case, exemplified by the Bulgarian National Bank, Hong Kong and Latvia, the local currency is backed at a fixed rate by the central bank's holdings of a foreign currency. Similar to commercial banks, central banks incur liabilities. Central banks create money by issuing interest-free currency notes and selling them to the public in exchange for interest-bearing assets such as government bonds.
When a central bank wishes to purchase more bonds than their respective national governments make available, they may purchase private bonds or assets denominated in foreign currencies. The European Central Bank remits its interest income to the central banks of the member countries of the European Union; the US Federal Reserve remits all its profits to the U. S. Treasury; this income, derived from the power to issue currency, is referred to as seigniorage, belongs to the national government. The state-sanctioned power to create currency is called the Right of Issuance. Throughout history there have been disagreements over this power, since whoever controls the creation of currency controls the seigniorage income; the expression "monetary policy" may refer more narrowly to the interest-rate targets and other active measures undertaken by the monetary authority. Frictional unemployment is the time period between jobs when a worker is searching for, or transitioning from one job to another. Unemployment beyond frictional unemployment is classified as unintended unemployment.
For example, structural unemployment is a form of unemployment resulting from a mismatch between demand in the labour market and the skills and locations of the workers seeking employment. Macroeconomic policy aims to reduce unintended unemployment. Keynes labeled any jobs that would be created by a rise in wage-goods as involuntary unemployment: Men are involuntarily unemployed if, in the event of a small rise in the price of wage-goods to the money-wage, both the aggregate supply of labour willing to work for the current money-wage and the aggregate demand for it at that wage would be greater than the existing volume of employment.—John Maynard Keynes, The General Theory of Employment and Money p11 Inflation is defined either as the devaluation of a currency or equivalently the rise of prices relative to a currency. Since inflation lowers real wages, Keynesians view inflation as the solution to involuntary unemployment. However, "unanticipated" inflation leads to lender losses as the real interest rate will be lower than expected.
Thus, Keynesian monetary policy aims for a steady rate of inflation. A publication from the Austrian School, The Case Against the Fed, argues that the efforts of the central banks to control inflation have been counterproductive. Economic growth can be enhanced by investment such as more or better machinery. A low interest rate implies that firms can borrow money to invest in their capital stock and pay less interest for it. Lowering the interest is therefore considered to encourage economic growth and is used to alleviate times of low economic growth. On the other hand, raising the interest rate is used in times of high economic growth as a contra-cyclical device to keep the economy from overheating and avoid market bubbles. Further goals of monetary policy are stability of interest rates, of the financial market, of the foreign exchange market. Goals cannot be separated fr
The Bermudian dollar is the official currency of the British Overseas Territory of Bermuda. It is subdivided into 100 cents; the Bermudian dollar is not traded outside Bermuda, is pegged to the United States dollar at a one-to-one ratio. Both currencies circulate in Bermuda on an equal basis. For nearly four hundred years Spanish dollars, known as "pieces of eight" were in widespread use on the world's trading routes, including the Caribbean region. However, following the revolutionary wars in Latin America, the source of these silver trade coins, dried up; the United Kingdom had adopted a successful gold standard in 1821, so the year 1825 was an opportune time to introduce the British sterling coinage into all the British colonies. An imperial Order in Council was passed in that year for the purposes of facilitating this aim by making sterling coinage legal tender in the colonies at the specified rate of 1 Spanish dollar to 4 shillings, 4 pence sterling; as the sterling silver coins were attached to a gold standard, this exchange rate did not realistically represent the value of the silver in the Spanish dollars as compared to the value of the gold in the British gold sovereign.
Because of this, the conversion had the opposite effect in many colonies, drove sterling coinage out of circulation, rather than encouraged its use. Remedial legislation had to be introduced in 1838 so as to change over to the more realistic rating of $1 = 4s 2d. However, in Jamaica, British Honduras, in the Bahamas the official rating was set aside in favour of what was known as the'Maccaroni' tradition in which a British shilling, referred to as a'Maccaroni', was treated as one quarter of a dollar; the common link between these four territories was the Bank of Nova Scotia which brought in the'Maccaroni' tradition, resulting in the successful introduction of both sterling coinage and sterling accounts. It wasn't however until 1 January 1842 that the authorities in Bermuda formally decided to make sterling the official currency of the colony to circulate concurrently with Doubloons at the rate of $1 = 4s 2d. Contrary to expectations, unlike in the Bahamas where US dollars circulated concurrently with sterling, the Bermudas did not allow themselves to be drawn into the U. S. currency area.
The Spanish dollars fell away in the 1850s but returned again in the 1870s following the international silver crisis of 1873. In 1874, the Bermuda merchants agreed unanimously to decline to accept the heavy imports of US currency except at a heavy discount, it was exported again, and in 1876, legislation was passed to demonetise the silver dollars for fear of them returning. In 1882, the local'legal tender act' demonetised the gold doubloon, which had in effect been the real standard in Bermuda, this left pounds and pence as the sole legal tender; the pound sterling remained the official currency of Bermuda until 1970, though the Government of Bermuda did issue its own pound banknotes. With US and Canadian coins appearing in circulation in Bermuda and the possibility of the devaluation of the pound sterling, Bermuda was compelled to adopt its own decimal currency. On 6 February 1970, Bermuda introduced a new decimal currency in the form of a dollar; the nascent Bermudian dollars circulated in conjunction with the new British decimal coinage a year before it was introduced in the United Kingdom.
By adopting decimalisation early, Bermuda was able place orders for the coinage from the Royal Mint before other Commonwealth countries seeking to decimalise could. The link between the Bermudian dollar and the pound sterling was not broken until 31 July 1972, which allowed Bermuda to align to a one-to-one exchange rate with that of the United States; the decision for Bermuda to peg its dollar to the US dollar added convenience for the multitude of American tourists and businesses with whom Bermuda relied on. Since 1972, Bermuda law has required that local businesses charge prices in Bermudian dollars which, if paid in US dollars, must be accepted at a rate of 1:1. Only banks are allowed to exchange Bermudian dollars into US dollars or other currencies, subject to a 1% Foreign Currency Purchase Tax. Prior to decimalisation and conversion to the dollar, the Government of Bermuda did not issue its own coins, other than the commemorative Bermuda crowns, since the 19th Century at the latest. In 1970, the Bermuda Monetary Authority introduced coinage with denominations of 1, 5, 10, 25, 50 cents.
From its inception, the 1-cent coin was struck out of bronze until 1988, when it was replaced with copper-plated steel. The composition of the 1-cent coin was changed to copper-plated zinc in 1991. All other denominations, at the time, were minted from cupronickel. Nickel-brass 1-dollar and 5-dollar coins were issued in 1983. New 1-dollar coins that were thinner and one-third lighter than the 1983 issue were produced in 1988; the 50-cent denomination was phased out, with the coins being called in on 1 May 1990. All denominations of Bermuda coinage depict the monarch of the United Kingdom on the obverse Queen Elizabeth II. From 1970 through 1985, the royal effigy by Arnold Machin was used, followed by an effigy by Raphael Maklouf from 1986 through 1998; the current obverse, introduced in 1999, is the royal effigy sculpted by Ian Rank-Broadley. Bermuda has released commemorative coins to celebrate certain events, historical milestones and fauna; these coins bear a face value, but are seen more as collector's items or stores of v
The Bahamas, known as the Commonwealth of The Bahamas, is a country within the Lucayan Archipelago. The archipelagic state consists of more than 700 islands and islets in the Atlantic Ocean, is located north of Cuba and Hispaniola, northwest of the Turks and Caicos Islands, southeast of the U. S. state of Florida, east of the Florida Keys. The capital is Nassau on the island of New Providence; the designation of "the Bahamas" can refer either to the country or to the larger island chain that it shares with the Turks and Caicos Islands. The Royal Bahamas Defence Force describes the Bahamas territory as encompassing 470,000 km2 of ocean space; the Bahamas is the site of Columbus's first landfall in the New World in 1492. At that time, the islands were inhabited by the Lucayans, a branch of the Arawakan-speaking Taíno people. Although the Spanish never colonised the Bahamas, they shipped the native Lucayans to slavery in Hispaniola; the islands were deserted from 1513 until 1648, when English colonists from Bermuda settled on the island of Eleuthera.
The Bahamas became a British crown colony in 1718. After the American Revolutionary War, the Crown resettled thousands of American Loyalists in the Bahamas. Africans constituted the majority of the population from this period; the slave trade was abolished by the British in 1807. Subsequently, the Bahamas became a haven for freed African slaves. Today, Afro-Bahamians make up nearly 90% of the population; the Bahamas became an independent Commonwealth realm in 1973 with Elizabeth II as its queen. In terms of gross domestic product per capita, the Bahamas is one of the richest countries in the Americas, with an economy based on tourism and finance; the name Bahamas is most derived from either the Taíno ba ha ma, a term for the region used by the indigenous Native Americans, or from the Spanish baja mar reflecting the shallow waters of the area. Alternatively, it may originate from a local name of unclear meaning; the word The constitutes an integral part of the short form of the name and is, capitalised.
So in contrast to "the Congo" and "the United Kingdom", it is proper to write "The Bahamas." The name The Bahamas is thus comparable with certain non-English names that use the definite article, such as Las Vegas or Los Angeles. The Constitution of the Commonwealth of The Bahamas, the country's fundamental law, capitalizes the "T" in "The Bahamas." Taino people moved into the uninhabited southern Bahamas from Hispaniola and Cuba around the 11th century, having migrated there from South America. They came to be known as the Lucayan people. An estimated 30,000 Lucayans inhabited the Bahamas at the time of Christopher Columbus's arrival in 1492. Columbus's first landfall in the New World was on an island; some researchers believe this site to be present-day San Salvador Island, situated in the southeastern Bahamas. An alternative theory holds that Columbus landed to the southeast on Samana Cay, according to calculations made in 1986 by National Geographic writer and editor Joseph Judge, based on Columbus's log.
Evidence in support of this remains inconclusive. On the landfall island, Columbus exchanged goods with them; the Spanish forced much of the Lucayan population to Hispaniola for use as forced labour. The slaves suffered from harsh conditions and most died from contracting diseases to which they had no immunity; the population of the Bahamas was diminished. In 1648, the Eleutherian Adventurers, led by William Sayle, migrated from Bermuda; these English Puritans established the first permanent European settlement on an island which they named Eleuthera—the name derives from the Greek word for freedom. They settled New Providence, naming it Sayle's Island after one of their leaders. To survive, the settlers salvaged goods from wrecks. In 1670, King Charles II granted the islands to the Lords Proprietors of the Carolinas in North America, they rented the islands from the king with rights of trading, appointing governors, administering the country. In 1684 Spanish corsair Juan de Alcon raided Charles Town.
In 1703, a joint Franco-Spanish expedition occupied the Bahamian capital during the War of the Spanish Succession. During proprietary rule, the Bahamas became a haven for pirates, including Blackbeard. To put an end to the'Pirates' republic' and restore orderly government, Great Britain made the Bahamas a crown colony in 1718 under the royal governorship of Woodes Rogers. After a difficult struggle, he succeeded in suppressing piracy. In 1720, Rogers led local militia to drive off a Spanish attack. During the US War of Independence in the late 18th century, the islands became a target for US naval forces under the command of Commodore Esek Hopkins. US Marines occupied the capital of Nassau for 2 weeks. In 1782, following the British defeat at Yorktown, a Spanish fleet appeared off the coast of Nassau; the city surrendered without a fight. Spain returned possession of the Bahamas to Great Britain the following year, u
United States dollar
The United States dollar is the official currency of the United States and its territories per the United States Constitution since 1792. In practice, the dollar is divided into 100 smaller cent units, but is divided into 1000 mills for accounting; the circulating paper money consists of Federal Reserve Notes that are denominated in United States dollars. Since the suspension in 1971 of convertibility of paper U. S. currency into any precious metal, the U. S. dollar is, de facto, fiat money. As it is the most used in international transactions, the U. S. dollar is the world's primary reserve currency. Several countries use it as their official currency, in many others it is the de facto currency. Besides the United States, it is used as the sole currency in two British Overseas Territories in the Caribbean: the British Virgin Islands and Turks and Caicos Islands. A few countries use the Federal Reserve Notes for paper money, while still minting their own coins, or accept U. S. dollar coins. As of June 27, 2018, there are $1.67 trillion in circulation, of which $1.62 trillion is in Federal Reserve notes.
Article I, Section 8 of the U. S. Constitution provides that the Congress has the power "To coin money". Laws implementing this power are codified at 31 U. S. C. § 5112. Section 5112 prescribes the forms; these coins are both designated in Section 5112 as "legal tender" in payment of debts. The Sacagawea dollar is one example of the copper alloy dollar; the pure silver dollar is known as the American Silver Eagle. Section 5112 provides for the minting and issuance of other coins, which have values ranging from one cent to 100 dollars; these other coins are more described in Coins of the United States dollar. 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"; that provision of the Constitution is made specific by Section 331 of Title 31 of the United States Code. The sums of money reported in the "Statements" are being expressed in U. S. dollars. The U. S. dollar may therefore be described as the unit of account of the United States.
The word "dollar" is one of the words in the first paragraph of Section 9 of Article I of the Constitution. There, "dollars" is a reference to the Spanish milled dollar, a coin that had a monetary value of 8 Spanish units of currency, or reales. In 1792 the U. S. Congress passed a Coinage Act. Section 9 of that act authorized the production of various coins, including "DOLLARS OR UNITS—each to be of the value of a Spanish milled dollar as the same is now current, to contain three hundred and seventy-one grains and four sixteenth parts of a grain of pure, or four hundred and sixteen grains of standard silver". Section 20 of the act provided, "That the money of account of the United States shall be expressed in dollars, or units... and that all accounts in the public offices and all proceedings in the courts of the United States shall be kept and had in conformity to this regulation". In other words, this act designated the United States dollar as the unit of currency of the United States. Unlike the Spanish milled dollar, the U.
S. dollar is based upon a decimal system of values. In addition to the dollar the coinage act established monetary units of mill or one-thousandth of a dollar, cent or one-hundredth of a dollar, dime or one-tenth of a dollar, eagle or ten dollars, with prescribed weights and composition of gold, silver, or copper for each, it was proposed in the mid-1800s that one hundred dollars be known as a union, but no union coins were struck and only patterns for the $50 half union exist. However, only cents are in everyday use as divisions of the dollar. XX9 per gallon, e.g. $3.599, more written as $3.599⁄10. When issued in circulating form, denominations equal to or less than a dollar are emitted as U. S. coins while denominations equal to or greater than a dollar are emitted as Federal Reserve notes. Both one-dollar coins and notes are produced today, although the note form is more common. In the past, "paper money" was issued in denominations less than a dollar and gold coins were issued for circulation up to the value of $20.
The term eagle was used in the Coinage Act of 1792 for the denomination of ten dollars, subsequently was used in naming gold coins. Paper currency less than one dollar in denomination, known as "fractional currency", was sometimes pejoratively referred to as "shinplasters". In 1854, James Guthrie Secretary of the Treasury, proposed creating $100, $50 and $25 gold coins, which were referred to as a "Union", "Half Union", "Quarter Union", thus implying a denomination of 1 Union = $100. Today, USD notes are made from cotton fiber paper, unlike most common paper, made of wood fiber. U. S. coins are produced by the United States Mint. U. S. dollar banknotes are printed by the Bureau of Engraving and Printing and, since 1914, have been issued by t