Editing Currency (section)

{{short description|Medium of exchange for goods or services}}
{{other uses}}
{{Use mdy dates|date=March 2019}}
{{Numismatics}}
A '''currency'''{{efn|From {{langx|enm|curraunt}}, 'in circulation', from {{langx|la|[[Wikt:currens|currens]], -entis}}, literally 'running' or 'traversing'}} is a standardization of [[money]] in any form, in use or [[currency in circulation|circulation]] as a [[medium of exchange]], for example [[banknote]]s and [[coin]]s.<ref>{{cite web | url = http://www.thefreedictionary.com/currency | title = Currency | publisher = The Free Dictionary | quote = currency [...] 1. Money in any form when in actual use as a medium of exchange, especially circulating paper money.}}</ref><ref name=Bernstein>{{cite book |last = Bernstein |first = Peter |author-link = Peter L. Bernstein |title= A Primer on Money, Banking and Gold | edition = 3rd |year= 2008 |orig-year= 1965 |publisher= Wiley |location= Hoboken, NJ  |isbn= 978-0-470-28758-3 | oclc = 233484849 | chapter= 4–5}}</ref> A more general definition is that a currency is a ''system of money'' in common use within a specific environment over time, especially for people in a nation state.<ref>{{cite web | url = http://www.investopedia.com/terms/c/currency.asp#axzz2CqfsX9BD | title = Currency | publisher = Investopedia}}</ref> Under this definition, the [[Pound sterling|British Pound sterling]] (£), [[euro]]s (€), [[Japanese yen]] (¥), and [[United States dollar|U.S. dollars]] (US$) are examples of (government-issued) [[fiat currencies]]. Currencies may act as [[store of value|stores of value]] and be traded between nations in [[foreign exchange market]]s, which determine the relative values of the different currencies.<ref>{{Cite news | url = https://docs.google.com/fileview?id=0B_Qxj5U7eaJTZTJkODYzN2ItZjE3Yy00Y2M0LTk2ZmUtZGU0NzA3NGI4Y2Y5&hl=en&pli=1 | newspaper = The Economist | title = Guide to the Financial Markets | format = PDF | page = 14 | quote = Determining the relative values of different currencies is the role of the foreign-exchange markets.}}</ref> Currencies in this sense are either chosen by users or decreed by governments, and each type has limited boundaries of acceptance; i.e., [[legal tender]] laws may require a particular unit of account for [[Payment|payments]] to [[government]] agencies.

Other definitions of the term ''currency'' appear in the respective synonymous articles: [[banknote]], [[coin]], and [[money]]. This article uses the definition which focuses on the currency systems of countries.

One can classify currencies into three [[monetary system]]s: [[fiat money]], [[commodity money]], and [[representative money]], depending on what guarantees a currency's value (the [[economy]] at large vs. the government's [[gold reserve|precious metal reserves]]). Some currencies function as [[legal tender]] in certain [[jurisdiction]]s, or for specific purposes, such as payment to a government ([[tax]]es), or government agencies (fees, fines). Others simply get traded for their economic value.

The concept of a [[digital currency]] has arisen in recent years. Whether government-backed digital notes and coins (such as the [[digital renminbi]] in China, for example) will be successfully developed and implemented remains unknown.<ref>{{Cite web|title= Electronic finance: a new perspective and challenges|url= https://www.bis.org/publ/bppdf/bispap07.pdf |archive-url=https://ghostarchive.org/archive/20221009/https://www.bis.org/publ/bppdf/bispap07.pdf |archive-date=2022-10-09 |url-status=live|date= November 2001|website= Bank for International Settlements|access-date= 2020-05-11}}</ref> Digital currencies that are not issued by a government [[monetary authority]], such as [[cryptocurrencies]] like [[Bitcoin]], are different because their value is market-dependent and has no [[wikt:safety net|safety net]]. Various countries have expressed concern about the opportunities that cryptocurrencies create for illegal activities such as [[Internet fraud|scams]], [[ransomware]] ([[extortion]]), [[money laundering]] and [[terrorism]].<ref>{{Cite web |url= https://www.loc.gov/law/help/cryptocurrency/world-survey.php |title= Regulation of Cryptocurrency Around the World| website= [[Library of Congress]] |date= 2019-08-16 | page = 1 | quote = One of the most common actions identified across the surveyed jurisdictions is government-issued notices about the pitfalls of investing in the cryptocurrency markets. [...] Many of the warnings issued by various countries also note the opportunities that cryptocurrencies create for illegal activities, such as money laundering and terrorism.}}</ref> In 2014, the United States [[IRS]] advised that virtual currency is treated as [[property]] for federal [[income tax|income-tax]] purposes, and it provides examples of how long-standing tax principles applicable to transactions involving property apply to virtual currency.<ref>
{{Cite web |url= https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions | title= Frequently Asked Questions on Virtual Currency Transactions|date= 2019-12-31}}</ref>