A nation's currency is its money, either in the form of paper money, coins, banknotes, etc. International currencies, which are represented by their codes, play an important role in international trade and are usually exchanged at the prevailing exchange rates.
The currencies vary depending on the exchange rate regime. Exchange rates are market driven and the value of the currency is determined by the supply-demand model, while for fixed currencies the exchange rate is set and maintained by the state. The US dollar, euro, pound sterling and yen are just some of the major international currencies that dominate current world trade.
International currencies are identified by their unique three-digit codes. These codes conform to the ISO 4217 standard. Currency codes are used in business, bank, international flight and train tickets to avoid confusion about the price. The first two characters of the code are the ISO 3166-1 country code, which is also used for national domains on the Internet, and the last digit of the currency code is usually derived from the name of the currency. For example, the currency code of the US dollar is USD, a combination of the US dollar, the country code of the United States, and D, derived from the dollar.
However, there are only a few international currencies that are not part of ISO 4217 due to their non-independence and as a variant of other currencies. Some of them are Alderney Pound, Cook Island Dollar, Jersey Pound etc.
Some interesting facts about international currencies:
• Different countries can have the same name for their national currency. Ex: "Dollar" is the currency of the United Nations, Canada, Australia, etc.
• Many countries can use the same currency. Example: Euro is the official currency of 16 of the 27 countries in the European Union.
• A country can use another country's currency as a legal tender, a payment to settle a debt.
• Each international currency has a major currency unit, namely 1, and a fractional currency, which is usually 1/100. Example: 100 cents = 1 dollar.
• There are only a few currencies without smaller units, namely Icelandic crowns.
For international payments, it is useful to know the international currencies and their codes.