Currency of the United States

Currency of the United States
Name	United States dollar
Local names	English: United States dollar
Iso code	USD
Subunit name	cent
Subunit ratio	1/100
Issuing authority	Federal Reserve System
Mint	United States Mint
Banknote issuer	Bureau of Engraving and Printing

Currency of the United States

The United States dollar serves as the official medium of exchange in the United States, issued by the Federal Reserve System and produced by the United States Mint and the Bureau of Engraving and Printing. Its history intersects with figures and institutions such as George Washington, the Continental Congress, the Coinage Act of 1792, the Federal Reserve Act, and events including the American Revolutionary War and the Great Depression. The dollar functions within global networks linked to Bretton Woods Conference, International Monetary Fund, World Bank, and markets in London, New York City, and Tokyo.

History

Colonial currency precedents included instruments from Massachusetts Bay Colony, Pennsylvania, and private issuers like the Penny Post-era script, preceding the Continental Currency issued by the Continental Congress during the American Revolutionary War. The Coinage Act of 1792 established the dollar and created the United States Mint under the administration of George Washington and Alexander Hamilton, who advocated for a national mint and specie standards. Nineteenth-century developments saw the Free Silver Movement, the National Banking Acts, and circulation of banknotes by institutions such as the Second Bank of the United States and state-chartered banks, challenged by crises like the Panic of 1837 and the Panic of 1907. The Federal Reserve Act of 1913 created the Federal Reserve System to stabilize credit after the Panic of 1907, while the Gold Reserve Act of 1934 and policies under Franklin D. Roosevelt abrogated gold convertibility amid the Great Depression. Post-World War II arrangements at the Bretton Woods Conference tied the dollar to gold, later ended by decisions of Richard Nixon during the Nixon shock, shaping modern fiat currency regimes managed by the Federal Reserve and international institutions like the International Monetary Fund and World Bank.

Coins

United States coinage produced by the United States Mint includes denominations such as the cent, nickel, dime, quarter, half dollar, and dollar, with historic issues like the Flowing Hair dollar, Morgan dollar, and Peace dollar. Designs have commemorated figures and events including Abraham Lincoln, Franklin D. Roosevelt, Thomas Jefferson, John F. Kennedy, and anniversaries like Lewis and Clark Expedition bicentennials. Mint facilities at Philadelphia Mint, Denver Mint, San Francisco Mint, and West Point Mint strike circulating and collectible pieces, with programs such as the American Silver Eagle bullion series and the Presidential $1 Coin Program. Debates over composition have involved materials like copper, nickel, silver, and clad alloys, and policy actions by legislators in the United States Congress and officials such as secretaries of the Treasury of the United States.

Banknotes

Paper and polymer banknotes are produced by the Bureau of Engraving and Printing and issued by the Federal Reserve System in denominations of $1, $2, $5, $10, $20, $50, and $100, with historic large-denomination notes such as the $500 and $1,000 series used in earlier eras. Portraits on notes honor individuals including George Washington, Thomas Jefferson, Abraham Lincoln, Alexander Hamilton, Ulysses S. Grant, and Benjamin Franklin, while vignettes reference institutions and events like the United States Capitol, Independence Hall, and the Declaration of Independence. Collecting and numismatic study involve organizations such as the American Numismatic Association and auction houses in New York City and Baltimore, where rare issues like the 1890 Treasury Note and 1934 Gold Certificates attract attention. Legislative actions, including those by the United States Congress and the Treasury Department, have shaped note design and denominations, while legal instruments like the Legal Tender Cases and statutes define issuance authorities.

Monetary Policy and Issuance

Monetary policy affecting the dollar is conducted by the Federal Reserve System through tools involving the Federal Open Market Committee, open market operations with primary dealers such as Goldman Sachs and J.P. Morgan Chase, discount window lending, and reserve requirements established under statutes like the Federal Reserve Act. Coordination with the United States Department of the Treasury influences debt issuance, as seen in Treasury auctions and Treasury securities management with participants including the Securities and Exchange Commission and Primary Dealers. Policy decisions respond to macroeconomic indicators from agencies such as the Bureau of Labor Statistics and the Bureau of Economic Analysis, and are informed by events including the 2008 financial crisis and responses by officials like Alan Greenspan, Ben Bernanke, Janet Yellen, and Jerome Powell.

Security Features and Counterfeiting

Security features on banknotes include portrait watermark references to engraving techniques pioneered by artists like Constantin T. Brumidi, color-shifting inks, security threads, microprinting, and raised intaglio printing produced by the Bureau of Engraving and Printing. Anti-counterfeiting enforcement involves agencies such as the United States Secret Service, Federal Bureau of Investigation, and international cooperation with Interpol and central banks like the European Central Bank. Historic counterfeiting episodes implicated figures and operations such as counterfeiters during the Civil War and organized schemes prosecuted under statutes administered by Department of Justice offices.

Circulation, Exchange Rates, and Legal Tender

The dollar circulates domestically across payment systems including Federal Reserve Banks and privately operated networks such as Visa and Mastercard, and underpins international transactions in markets like London, Hong Kong, and Singapore. Exchange rates are determined in foreign exchange markets involving institutions like the New York Stock Exchange and Chicago Mercantile Exchange, influenced by policies from the Federal Reserve and fiscal actions by the United States Department of the Treasury. The legal tender status of Federal Reserve notes is governed by statutes enacted by the United States Congress and interpreted in cases before the United States Supreme Court, while practices such as international dollarization occur in jurisdictions like Panama and Ecuador, reflecting the dollar’s global role facilitated by organizations such as the International Monetary Fund and World Bank.

Category:Currencies of the United States