What Is the Currency of the United States?

By Ritu Kohli on July 4 2018 in Economics

United States dollar banknotes.

The currency of the United States is the United States dollar (USD). The United States dollar is undoubtedly the most powerful currency in the world.The dollar derives its strength from the economic and political might of the USA. Its sign is $, and its currency code is USD. It is sometimes abbreviated as US$.

Globally, the US dollar is the foremost reserve currency along with the euro and Special Drawing Rights (SDR). The US currency is sometimes colloquially known as "Greenbacks." The US dollar used to be pegged to gold reserves, however, in 1971, US President Richard Nixon broke the link between the dollar and gold and dollar's value was permitted to float based on market conditions.

Contrary to popular belief, the Federal Reserve of the United States does not print the US currency. The paper currency is printed by the Bureau of Engraving and Printing (BEP) and the coins are minted by the US Mint. Both these entities are part of the US Treasury Department. BEP is also responsible for redesigning the money with new security features and appearances.

Coins and Banknotes

US banknotes come in the denominations of $1, $2, $5, $10, $20, $50 and $100. Larger denominations, such $500, $1,000, $5,000 and $10,000 dollar bills, are no longer printed. The common coin denominations are 1¢, 5¢, 10¢, 25¢, 50¢ and $1.

The US has a decimal currency system. The base unit is a dollar, which is made up of 100 cents. One cent is also known as a penny.

A penny is a copper plated zinc coin. It has Abraham Lincoln, the 16th US President, on one side, and the Lincoln Memorial on the other side.

The five cent coin is called a nickel. In size, a nickel is larger than a penny. It has Thomas Jefferson, the 3rd US President and Monticello (Jefferson's home) on either side.

The ten cent coin is called a dime. It is smaller in size than the penny and the nickel. Franklin Delano Roosevelt, the 32nd US President is on one side of the dime, and there are Olive Branch, a Torch and an Oak Branch on the other side.

The twenty-five cent coin is called a quarter. The size of a quarter is larger than that of a nickel. A quarter has George Washington, the 1st US President, on one side. The other side either has a United States emblem (eagle) or a design of one of the fifty states of the US. A half dollar coin is worth fifty cents. It is silver coated copper coin. The coin’s one side has John F. Kennedy, the 35th US president. The other side has The Presidential Seal.

The US also has a one dollar coin. It is golden in color and is made up of a manganese and brass alloy. The dollar coin features Sacagawea, a Native American heroine, on one side, and a Soaring bald Eagle and 17 Stars on the other. Every US coin has two phrases. The first phrase is ‘E Pluribus Unum’, meaning ‘Out of Many, One,’ and the second phrase is "In God we trust."

Perhaps the most instantly recognizable paper money in the world is the US one dollar banknote. It features George Washington, the first US president, on the front side, and the pyramid and the eagle, which together constitute the Great Seal of the United States, on its back side.

More in Economics