Currency is defined as a unit of exchange. It is usually an object that is portable and easily traded, that has a recognized value. A particular currency is agreed upon by a group of people, a country or individual person as having a particular value of use in the exchange of goods and services.
There are thousands of different currencies traded in the world on a daily basis. There are several basic categories that involve the largest number of currency trades in the world. These currencies are metal coins, paper money, checks and credit cards.
These types of currencies are the ones most frequently used in exchanges between people and businesses or people and governments.
There is no limit to the amount of currency that can be traded at once, and there are large trades that occur all the time. In the modern world, most of these huge trades take place electronically, without the actually physical relocation of currency.
Countries and individuals around the world agree with one another on the value of one currency in comparison to another currency, and the rate of trade, or the exchange rate, is set based on that established and agreed upon value.
In larger, developed countries, central banks or finance ministries have control over monetary policy. In most western countries, the monetary authority is separate from the government. Although the government overseas the monetary body and technically could revoke its authority, the likelihood of this happening is small.
Different countries may have the same name for distinct currencies. For example, the dollar is the name for the Canadian currency and the American currency, although they are separate and distinct currencies with different exchange rates.
On the other hand, several countries may use the exact same currency, such as the euro. The Euro is accepted equally in England, France, and several other European nations.