American dollar

Article

May 23, 2022

The United States dollar (also abbreviated with the symbols $, US$, or its international standard USD) is the legal tender of the United States, its dependencies, and other countries. The dollar is the most important international reserve currency in the world and also the most used in international transactions.[2] Its status as the world reference currency has made it the official currency of several countries and the de facto currency in many others,[3] who use their paper money for current transactions or give a fixed exchange rate to their national currencies with respect to the dollar. The monetary policy of the United States is in charge of the Federal Reserve System, which acts as the central bank of the nation and which is also in charge of issuing the dollars. The ISO 4217 code for this currency is USD. This currency was created in 1792, with the approval of the Coinage Act, which introduced the dollar, divided into 100 cents and with a value equal to the real of 8 Spanish and the authority for the minting of coins denominated in dollars and cents. The US dollar, whose most characteristic and historically predominant color has been green on its banknotes, was originally characterized by bimetallism: its value was set at 24.057 grams of fine silver or, since 1837, at 1.505 grams of gold or 20 $.67 per troy ounce. The Gold Standard Act of 1900 broke with bimetallism by linking the dollar only to gold. The dollar became an important reserve currency from the end of the First World War and displaced the pound sterling as the main reserve currency in the world after the Bretton Woods agreement at the end of the Second World War. In 1934, its equivalence with gold was revised up to 35 dollars per troy ounce, a value that it would maintain for several decades,[4] until in 1971 it was definitively detached from the gold standard,[4] so the currency became, de facto, a fiat currency.[5] Although the issuance of this class of dollars is only done in the United States, fourteen other countries use the name "dollar" for their currency. For their part, other nations such as Ecuador, El Salvador, Panama and East Timor, through ratifications and agreements or as a replacement for their own weakened currency, have chosen it as their official currency and legal means of payment. As of June 2021, physical currency in circulation stood at $2.10 trillion, $2.05 trillion of which was in the form of Federal Reserve Notes and the remaining $50 billion in the form of US coins and other bonds or paper money. [6]

The dollar sign

There are several versions about the origin of the $ symbol, most pointing to a Hispanic origin. The one that is possibly the most widely accepted, according to the United States Bureau of Engraving and Printing, is that it is the result of the evolution of the New Spain and Spanish abbreviation Ps, which abbreviated pesos, piastres, or pieces of eight. . This theory, derived from the study of manuscripts from the 18th and 19th centuries, explains that the s gradually came to be written over the P, developing a close equivalent to $. The symbol was widely used before the adoption of the USD in 1785.[7] Another is that the symbol was derived from—or inspired by—the mint mark of the city's Spanish colonial mint. The Potosí mine was located there, in what is now the country of Bolivia. This mintmark was made up of the letters PTSI superimposed one on top of the other, forming a symbol very similar to the original dollar sign (that of a vertical bar: $). Spanish silver reales—the "pieces of eight"—were in common use in the English colonies of North America. Much of these coins would be minted in the Potosí mine. These, moreover, would have had a somewhat high profile, since the