U.S Dollar

Name of Currency: U.S. Dollar

Country / countries used: United States, Panama, Ecuador, El Salvador, Phillipines, Puerto Rico, Northern Mariana Islands, U.S. Virgin Islands, American Samoa, Guam, United States Minor Outlying Countries

Symbol: $

Brief history:  The U.S. Dollar was founded in 1792 by the U.S. Constitution and the Coinage Act of 1972, which defined a dollar to be based on the Spanish milled dollar. The U.S. Dollar, abbreviated USD, is the currency used most in international transactions and is also one of the world’s most dominant reserve currencies.  Countries that use the USD as their national currency include the United States, Panama, Ecuador, El Salvador and Philippines, as well as 14 U.S. and 4 non-U.S. territories.  Many other countries also use the USD as their de facto currency, meaning that the USD is not legal tender, but is treated as such in these certain countries. Aruba, Cambodia and Panama are examples of countries that use the USD in this way. The United States Federal Reserve is the central bank that currently manages and administers the USD.  The Federal Reserve keeps over 800 billion USD in cash in circulation.  To increase the amount of cash in circulation, the Federal Reserve will buy securities and to decrease, they sell securities.  The value of the USD fluctuated until after World War II when it was set at a gold standard of $35 per ounce of gold.  This was the system used until 1971, when President Nixon ended gold convertibility in the face of a currency crisis in the late 1960s.  Since that time, the USD has lost over half of its value.  Today the USD notes are made up of cotton fibre paper and coins are produced by the United States Mint.  Originally the currency did not feature the faces of U.S. presidents as has been customary in the 20th century because George Washington did not want to borrow a policy from the British monarchs. Instead, money featured figures from Greek and Roman mythology and Native Americans.  Currently printed denominations are $1, $2, $5, $10, $20, $50 and $100.  Notes in denominations of $500, $1,000, $5,000, $10,000 and $100,000 were produced at one time but in 1946 and they were no longer being printed and by 1969 President Nixon ordered that they be withdrawn from circulation. The USD has many nicknames, including buck and greenback.