The US dollar (USD, United States dollar) is a legal tender in the United States, Puerto Rico, Micronesia, Puerto Rico, North Mariana Islands, Palau, Marshall Islands, Panama, Ecuador, El Salvador, East Timor, Zimbabwe as well as Bonaire, Saba and Sint Eustatius.
|American Dollar (USD)
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The commonly used symbol of the U.S. dollar is $. One dollar is subdivided into 100 cents. The banknotes issued have the following denominations: 1, 2, 5, 10 and 20, 50 and 100 dollars. Apart from common circulation, there are banknotes of 500, 1,000, 5,000, 10,000 and 100,000. Dollar banknotes present the faces of U.S. Presidents. There are coins of 1, 2, 5 and 25 and 50 cents. Also, a one dollar coin has been issued, though it is rarely seen today. The value of the dollar was initially based on a gold parity. Historically in 1900, the relation was 20.67 dollars for one ounce of gold. The value grew in time to 42 dollars in 1972. In 1973, the dollar became a floating currency. The material on which dollar banknotes are printed is comprised mainly of cotton and linen, is considered extremely durable (the average banknote life cycle is 5 years) and is well protected against forgery (red and blue threads inserted).
The U.S. dollar (USD) is the legal tender in the United States of America, described with the symbol USD (United States Dollar). In addition to the U.S., the American dollar is a legal tender in Puerto Rico, Micronesia and in the area of North Mariana Islands, on Palau and Marshall Islands; Ecuador since 2000 and since 2001 in El Salvador and East Timor. Since 2009, the dollar has been the legal tender of Zimbabwe, and since 2011 – also Bonaire, Saba and Sint Eustatius. The value of the dollar is a benchmark of value in many countries of the world, many international transactions are performed in U.S. dollars or after conversion to dollars. The dollar has a prominent place on currency markets and the world exchange market.
The name of “dollar" comes from the “rix-dollar", i.e. a silver coin. The Continental Congress of 1785 approved the name of the currency, acknowledging it was “dollar" and in 1792, the dollar became the legal tender. The dollar symbol “$" was first proposed by Olivier Pollock back in 1788. However, it appeared on paper as late as in 1862. It became a strong currency after WWII when it became an international currency.
The dollar is issued by the United States Mint and is supervised by the Federal Reserve System. The amount of cash that is to be in circulation in a specific year is decided upon by the Federal Board. In practice, this means issuance of debt securities sold for cash, or purchased, which allows regulation of the amount of cash in circulation. 38 billion dollar banknotes of the nominal value of 541 million dollars, 95% of which will be used for exchanging the banknotes in use into new ones. 48% of the daily print are one-dollar banknotes, which are the fastest to wear out.
At the same time, there are around 405 trillion dollars in global circulation, mainly in banknotes. It is estimated that this sum includes around 32 trillion in counterfeit banknotes. In many countries, the exchange rate of the dollar determines the price levels of basic products. The importance of the dollar as a global currency decreased after the introduction of the euro, however despite that, the value of the dollar still remains high in currency markets. The dollar is a currency that is convertible almost everywhere in the world.