The dollar is the primary currency of the United States of America. It is called simply the “dollar” and the ISO 4217 currency code is USD and the most traded currency is USD/EUR. The central bank that issues the dollar is referred to as the Federal Reserve Bank and it has several locations throughout the United States. The dollar is used as a primary currency throughout the United States and its territories. It is the de facto currency for many regions around the world and it is the standard against which international currency is measured. As a form of money, the dollar can appear in paper or coin form. The most common form is paper with any American currencies being worth less than a dollar coming in the form of a coin.
The earliest minted US dollar that was used as currency can be traced back to 1792. Before that date, the American colonies used British currencies. The conversion to the American dollar was slow and difficult.
The earliest dollars were minted coins that were very similar in look and feel to Spanish currency. The first dollar coins were made primarily of silver. The Coinage Act of 1792 described the US dollar as one-tenth the value of a type of currency called the Eagle. In the early days, American citizens required a reliable converter to help them understand the actual value of the dollar.
The US dollar avoided having any images of American presidents on it until the very early 20th century. Some of the images used on early American dollars included:
- Greek and Roman mythological figures
- Generic images of native Americans
- Animals native to the United States
- Scenes such as ships in a harbor
Before the establishment of the US dollar, the American economy was based on British shillings. The value of printed American colonial currency had a currency converter printed right on it that indicated how much the currency was worth in British shillings and pounds.
- The gold standard for backing the American dollar was first introduced in 1834
- The first paper money without the backing of the gold standard appeared in 1862. Paper was used because precious metal was scarce thanks to the Civil War.
- In 1933, President Roosevelt order all gold confiscated to try and salvage the gold standard and stabilize the value of the dollar in the face of the Great Depression
- The dollar is part of a list of denominations that includes bills worth two dollars, five dollars, 10 dollars, 50 dollars, 100 dollars, 500 dollars, 1,000 dollars, 5,000 dollars, 10,000 dollars and 100,000 dollars
- The two dollar bill is still legal tender in the United States, but the 5,000 and 10,000 bills have been discontinued because the larger bills made it easier for criminals to launder and traffic money
- The power for the United States government to make and distribute money comes directly from the Constitution
- The idea to put the images of presidents on the dollar started when George Washington was president. But Washington wanted to avoid using the same practices that the British had of putting sitting kings on currency, so Washington forbade any image of a living president from being put on the currency. That edict is still followed to this day.
The US dollar is officially known as “the dollar,” but it has also gathered some colorful nicknames over time. Some of those nicknames include:
- Dead presidents
The American dollar is legal tender anywhere in the world. But it is primarily used in the 50 states as well as the territories of the Virgin Islands and Puerto Rico. Other regions where the dollar is used as the primary currency include:
- The British Virgin Islands
- El Salvador
- Northern Mariana Islands
- American Samoa
Some of the regions that unofficially recognize the American dollar as legal tender include:
- East Timor
- Marshall Islands