Top 12 Most Used Currencies in The World: Currency more specifically refers to paper money that is used to facilitate transactions. It is the means of exchange by which commercial transactions are valued. There are about 180 different currencies existing across the globe today as was recognized by the UN. Currencies are limited within territories.
Thus, a currency used as means of exchange in one country would be alien to another country except that the value would be measured and be converted or exchanged to its value in that country. There are currencies that are so dominant that they are used as official exchange currency by more than one country. Noteworthy also is that the value of all currencies are not the same in the world economy. Various countries usually have their currency pegged at another stronger currency because of its world’s recognition, access and dominance to the world economy.
Top 12 Most Used/Traded Currencies in The World 2023
Here are the top most used currencies in the world:
1. US Dollar (USD): US Dollar is represented by the Symbols: $, U$ or US$. It is the legal tender of the United State of America. Us dollar is the most widely and the strongest of all currencies in the world. Other countries that use the currency are Cambodia, Palau, East Timor, Ecuador, Marshall Island, El Salvador, Panama, Micronesia and Zimbabwe. The US dollar was introduced on 2nd April, 17924. Since then the currency has dominated the world economy.
The US dollar is pegged by over 65 countries. Pegging of currency is an economic practice where a country has a fixed exchange system against another country’s currency which facilitates the ease of doing business and regulates inflation. The US dollar gained its total dominance after the World War I after it replaced the pound sterling as the primary reserve currency of the world.
The US dollar has been ascribed a lot of nicknames but most popularly is greenbacks due to its predominant green colour. Us dollar is made of cotton-linen. The value of dollar is largely promoted and sustained by the strong US economy and the fluctuations in other countries’ economy.
2. Euro (EUR): Euro is the second-most widely used currency in the world. Euro is represented by the symbol: € out the code: EUR. Euro is used as official currency by 19 Europeans union states out of the 27 European Union states. The 19 user states are referred to as the eurozone or euro area. The 19 user states are Austria, Belgium, Cyprus, Estonia, Portugal, Netherlands Slovenia, Germany, Finland, Greece, Ireland, Italy, Spain, Slovakia, Latvia, Malta, Luxembourg, France and Lithuania. Countries like Kosovo and Montenegro also use euro but unofficially.
The Euro is regulated by the European Central Bank. Euro is nicknamed the single currency because of its use by many countries. Euro is pegged by 12 countries. Euro began to be use in the world financial markets on 1st January 1999. 1. Its official name was adopted in Madrid in December 16th 1995. Euro is the second-biggest reserve currency across the globe. The value of the currency is largely sustained by economic and political development in the user states.
3. Japanese Yen (JPY): Japanese Yen is the third-most widely used currency in the world. Japanese yen is represented by the symbol: ¥ and the code: JPY or written as JP¥. Japanese Yen currency is ranked the third-most traded in the foreign exchange markets following the USD and the euro. It is equally the third-biggest reserve currency in the world following USD and the euro.
The Japanese yen is the primarily used in Japan and it is issued and regulated by the Bank of Japan which is the central bank. Japanese yen came into force by the virtue of the New Currency Act in the year 1871.
4. Pound Sterling (GBP): Pound sterling or the British pound is the official currency of the United Kingdom, the Crown Dependencies and the British Overseas Territories. The Currency is represented by the pound symbol: £. Pound sterling is issued and regulated by the Bank of England. British pound is pegged by Falkland Islands pound, Gibraltar pound, Saint Helena Pound, Jersey pound, Manx pound and Guernsey pound.
Pound sterling is the oldest currency in use, having been introduced in c.800; over 1200 years ago. Pound sterling is ranked the 4th most traded in the foreign exchange market. Pound sterling forms part of the currencies used by the International Monetary Fund (IMF) for units of account. It is also ranked the 4th largest reserve currency in the word.
5. Australian dollar (AUD): The Australian dollar is represented by the sign: $ and the code: AUD. It is the official currency of Australia, the 8th largest country in the world. Australia dollar is also used by 7 external territories of Australia which are Ashmore and Cartier Islands, Australian Antarctic Territory, Christmas Island, Cocos Islands, Coral Sea Islands Territory, Heard Island and McDonald Islands and Norfolk Island.
Australian dollar is also used by three other countries; Kiribati, Nauru and Tuvalu. Australia dollar came and replaced the Australian pound which was in use from 1910 till 1966. It was on 14th February 1966 that the Australian dollar was introduced. The currency is issued and regulated by the Reserve Bank of Australia. Australian dollar was pegged by Tuvaluan dollar and Kiribati dollar. The currency is ranked the 5th most traded in the world foreign exchange Markets.
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6. Canadian dollar (CAD): Canadian dollar is a high value currency and one of the most widely used currencies in the world. It is the legal tender of Canada. Canadian dollar is represented with the sign: $.
More often, it is represented as Can$ in order to distinguish it from other dollar currencies. Canadian dollar is unofficially used by St. Pierre and Miquelon. The issuer of the legal tender is the Bank of Canada which is the central bank.
Canadian dollar is nicknamed Loonie. The Currency is ranked the 5th largest reserve in the world. Canada is an economically and politically balanced country and these factors has kept the Canadian dollar on track.
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7. Swiss Franc (CHF): The Swiss Franc is the official legal tender of Switzerland, Liechtenstein and the Italy Compione d’Italia; an Italian territory by the Swiss territory. Swiss Franc is also used unofficially by Busingen am Hochrhein, Germany; a German territory surrounding Switzerland.
Swiss Franc is nicknamed Swiss German, Swiss Standard German and Swiss Italian. The legal tender is issued by the Swiss National Bank. The Swiss Franc is the 7th most traded currency across the globes and the 5th largest reserve in the world.
8. Chinese renminbi (CNY): The Chinese renminbi is ranked 8th as the most traded currency across the globe. It is the official legal tender of the People’s Republic of China (PRC). China is the most populous country in the world, recording an estimation of over 1.4 billion people.
China is an economically buoyant country. The current Chinese renminbi in use was introduced in 1948; an invention which replaced the nationalist-issued yuan as the tender of China. The currency is issued by the People’s Bank of China. The currency is partially pegged with the four currencies used by the International Monetary Fund as value units.
9. Hong Kong dollar (HKD): Hong Kong dollar is the legal tender of Hong Kong. The currency is represented by the sign: HK$ and the code: HKD. The currency is unofficially used by Macau which they use together with Macanese Pataca.
The Monetary authority of Hong Kong is known as the Hong Kong Monetary Authority. The HKD is pegged with the US dollar and pegged by Macau Pataca. The Hong Kong dollar is ranked 9th as the most traded currency across the globe.
10. New Zealand dollar (NZD): New Zealand dollar was introduced on 10th July, 1967, an introduction which replaced New Zealand pound. The New Zealand dollar is used by New Zealand, the New Zealand dependent territories; Cook Islands, Niue, Tokelau and Ross, and the British Overseas Territory Pitcairn Islands.
The symbol of the currency is represented by the dollar sign: $ and more specifically; NZ$ or $NZ. The legal tender issuer is the Reserve Bank of New Zealand. New Zealand dollar is pegged by the New Zealand dependent territories. The currency is nicknamed Kiwi dollar. New Zealand Is ranked 10th as the most traded currency across the globe.
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11. Pound of Gibraltar: Due to its consistency in the market, GIP ranks high on this list. GIP is another well-liked forex option that traders frequently select. This nation is located on Great Britain’s periphery. It occupies a favorable position in the market as a result. The market’s best pair is GIP and GBP, which provides traders with considerable volatility. Despite being a minor currency pair, GIP/GBP frequently brings in profits for traders.
GIP is impacted by a variety of factors, including GDP, ties to Great Britain, and more. This currency is managed by the Government of Gibraltar, and since 1825, GIP has played a significant role in the market. The Gibraltar Pound is offered in the same denominations as the British Pound.
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12. Singapore Dollar or SGD: The Singapore dollar is one of the most widely used currencies, as anyone who has spent any time in the currency market will know. This nation’s currency is managed by the Monetary Authority of Singapore, and it is well-known in the foreign exchange market.
Although some people mistakenly classify this as an exotic currency, traders place it in the minor group. This currency was issued before the end of 1967, and it has served as the official tender ever since. The SGD lump rate is approximately 0.612%, yet traders still choose this currency. Due to some characteristics of SGD, this currency is likewise not an exotic one. If you have trading experience, you can easily handle and trade this currency.
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A currency is most used depending on the overall population of the users and countries coupled with how well it is traded. This also goes to show how much of acceptability a particular currency has received. Most importantly, it is a country’s standard of economy that contributes to the value of its currency within the country and across the globe. Above-listed are the most widely used currencies across the globe.
Edeh Samuel Chukwuemeka ACMC, is a Law Student and a Certified Mediator/Conciliator in Nigeria. He is also a Developer with knowledge in HTML, CSS, JS, PHP and React Native. Samuel is bent on changing the legal profession by building Web and Mobile Apps that will make legal research a lot easier.