A currency in the most specific use of the word refers to money in any form when in actual use or circulation as a medium of exchange, especially circulating banknotes and coins. A more general definition is that a currency is a system of money (monetary units) in common use, especially in a nation. Under this definition, British pounds, U.S. dollars, and European euros are different types of currencies. These various currencies are stores of values, and are traded between nations in foreign exchange markets, which determine the relatives values of the different currencies. Currencies in this sense are defined by governments, and each type has limited boundaries of acceptance.
Other definitions of the terms “currency” are discussed in their respective synonymous articles banknote, coin, and money. The latter definition, pertaining to the currency system of nations, is the topic of this article. Currencies can be classified into two monetary system, fiat money and commodity money, depending on what guarantees the value (the economy at large vs the government’s physical metal reserves). Some currencies are legal tender in certain jurisdictions, which means they cannot be refused as payment for debt. Others are simply traded for their economic value. Digital Currency arose with the popularity of computers and internet.