What do you know about the money in your pocket? What about the bills and coins of other countries? Have you ever wondered which world currencies are strongest, rarest, or most traded?
As money transfer experts, we’re fascinated by the stories of the world’s money. That’s why we created this guide. From the riyal in Saudi Arabia to the Swedish króna, from the euro to the peso, here’s everything you need to know about currencies around the globe. Plus, learn about currency exchange and how to send money across borders.
What Are World Currencies?
Let’s start with the essentials. Currency is the term used for different types of money used in various countries, from Switzerland to Taiwan.
Historically, currency could take the form of tea, shells, or even large stones. These days, physical currency is typically in the form of a banknote or coin.
Currency names vary, though there are overlaps. For instance, the Australian dollar (AUD) and the dollar used in Canada (CDN) have different values, even though they are both “dollars.” Each currency also has a code established by the International Organization for Standardization (ISO).
Banknotes and coins are produced in a mint. From Pakistan to Portugal, each nation has its own treasury to produce its money. This involves a highly secure procedure to ensure there is little to no possibility for theft.
How Are Currencies Traded and Transferred?
World currencies are exchanged daily, especially for business and political purposes. In fact, almost 50% of U.S. currency is held outside the United States.
The market exchange rate dictates the value of each currency compared to another. The exchange rate may vary by day, based on a variety of economic and political factors.
International money transfer companies can help you send funds from one country to another.
How Many Currencies Are There in the World?
There are roughly 180 different types of currency in the world used in 195 different nations, as recognized by the United Nations.
The oldest currency in the world is the Great British pound (GBP), which dates back to the 8th century. Though new bills have been printed and designs have improved over time, the GBP has been the currency of the United Kingdom for centuries.
The currency in Russia, the ruble, has changed over time but has been dated back to the 13th century. The Israeli shekel has been around since the ‘80s, but actually first came into existence during the 4th century. The South Sudanese pound is the newest currency. It was released in July 2018.
What Is the Rarest Currency in the World?
The rarest coins in the world are discontinued. They include:
- The 1794 Flowing Hair Silver Dollar
- The 1787 Brasher Doubloon
- The 1787 Fugio cent
- The 723 Umayyad Gold Dinar
- The 1343 Edward III Florin
Other rare currencies include historical types of money, money from lesser-visited countries, and limited edition banknotes and coins.
What Is the Strongest Currency in the World?
The strongest currencies in the world are those with the highest value as compared to other currencies. The foreign exchange rate determines which currency is the strongest.
At the time of this writing, these are the top 7 currencies in the world, starting with the strongest:
- Kuwaiti Dinar
- Bahrain Dinar
- Omani Rial
- Jordan Dinar
- Pound Sterling
- Cayman Islands Dollar
Which Currencies are Backed by Gold?
The gold standard is not currently used by any government. Since the 1970s, the “gold standard,” which refers to cash backed by gold, has been put to rest almost everywhere in the world. Most nations now use fiat currency, which is money backed by a government instead of gold, silver, or other commodities.
The world’s major currencies, including the U.S. dollar, are fiat currencies.
The 5 Most Traded Currencies
At the time of this writing, the top five most popular currencies for trading are as follows:
- U.S. Dollar (USD)
- Euro (EUR)
- Japan’s Yen (JPY)
- Great British Pound (GBP)
- Canadian Dollar (CDN)
These currencies are traded daily by businesses, individuals, and even nations. These popular currencies are also used by other countries. For example, Chinese exports may sell at U.S. prices instead of Renminbi (or RMB, which translates to “the people’s currency”).
The U.S. dollar is the most commonly used and traded currency, even if it isn’t technically the strongest currency in the world.
What Are the 3 Types of Currencies?
There are three types of money or currency in the world:
Commodity money is goods exchanged for services or money. The goods refer to gold, silver, or other commodities the country may supply to others.
Fiat money is money backed by the government but not by gold or other commodities. This is why a country’s economy and political situation often affect the value of the nation’s currency.
Fiduciary money is the liquid money in circulation within a country. This includes cash, checks, banknotes, or bank drafts.
What about cryptocurrency?
The main difference between fiat money and cryptocurrencies is that fiat money derives its value because it’s backed by a government. Cryptocurrency is digital alone, and derives value from its native blockchain. The two systems that govern its distribution and regulation are quite different.
Exchange Rates Explained
You can also think of an exchange rate as describing how much of one currency can be bought by one unit of another. Outside of international money transfers, these rates are often spoken about in the context of overseas travel.
World Currency Guide
Facts about African money
Did you know? The R100 banknote of South Africa, known as the South African Rand, features a prison image to commemorate Nelson Mandela, who was imprisoned on Robben Island for 18 years.
For more interesting facts about currencies in Africa, take a look at these guides:
- Egyptian Pound
- Ghanaian Cedi
- Kenyan Shilling
- Moroccan Dirham
- Nigerian Naira
- Senegal West African CFA franc
- South African Rand
Facts about Asian money
True story: the strongest currency in the world is in Asia. It’s the Kuwaiti dinar. Other strong currencies from the vast continent include the Singapore dollar, the Hong Kong dollar, and the Brunei dollar.
For more interesting facts, check out these currency guides:
Facts about European money
The Euro (EUR) was introduced into most European Union countries starting in 1999, including Spain, Portugal, and the Netherlands. Before that, most European nations had their own currencies.
The Euro has been beneficial for trade among businesses in the EU. It is also quite convenient for travelers. It’s used in every EU nation, so if you’re traveling from France to Germany to Italy, you can simply use the same money in each country.
Not all countries in the region use the Euro, or at least, not yet. These include:
Facts about Latin American money
Some Latin countries, like Ecuador, actually use the U.S. dollar as their official currency. Others, like the Dominican Republic and Brazil, have their own currency, but you may find that individuals or businesses there accept U.S. dollars too.
Here are more interesting facts about the currency of Latin American countries:
- Brazilian Real
- Colombian Peso
- Costa Rican Colon
- Dominican Peso
- Guatemalan Quetzal
- Haitian Gourde
- Honduran Lempira
- Jamaican Dollar
- Mexican Peso
Other currency fun facts
Here are some interesting things you probably never knew about world currencies:
- Most paper money has a life cycle of about 15 years and is then taken out of circulation and replaced.
- If you hold U.S. paper money up to the light, you’ll see the printed face on the bill a second time.
- To become a bill engraver takes years of training.
- The Canadian penny went out of circulation because it cost more than one cent to manufacture each one.
- Only 8% of the world’s currency is in cash.
- The currency of Malaysia has images of its natural wonders, flora, and fauna on every bill.
- The forint was introduced in Hungary to stabilize the economy after the war.
- The dirham currency of the United Arab Emirates was derived from the Greek drachma.
How to Send Money Around the World
If you have loved ones overseas, you know how important it is to be able to send them money when they need it. Cashier’s checks and bank drafts may come with hefty service fees and can take a couple of weeks to arrive and then clear at the destination country’s bank.
Electronic money transfers make it simpler and more affordable to send money to your family and friends around the world. You can transfer directly from your bank account to a foreign bank account. You will need to pay the exchange fees and transfer fees, but the funds can be sent quickly.
Money transfer services make it simple for you to send money around the world, right from your phone. Usually, with a money transfer app you can send money overseas with your bank account, your credit card, or your debit card.
Remitly makes international money transfers faster, easier, more transparent, and more affordable. Our reliable and easy-to-use mobile app is trusted by over 5 million people around the world. Visit the homepage or download our app to learn more.