About the United States Dollar (USD)
What Is the United States Dollar (USD)?
The United States Dollar (USD), designated by the ISO code USD and commonly abbreviated as US$, is the official currency of the United States of America. It is one of the most widely recognized and influential currencies globally. The USD serves as the primary currency not only within the U.S. but also in its territories, such as Puerto Rico, Guam, and the U.S. Virgin Islands. Additionally, several countries, including Ecuador, El Salvador, and Zimbabwe, have adopted the USD as their official currency.
The Federal Reserve System (the Fed) manages the issuance and regulation of the USD, ensuring monetary stability. The U.S. Department of the Treasury oversees the printing of paper currency, while the United States Mint produces coins.
History of the USD
The USD’s origins trace back to post-independence America when diverse foreign currencies circulated. On July 6, 1785, the Continental Congress adopted the dollar as the national currency, influenced by the Spanish dollar’s prevalence. The Coinage Act of 1792 formalized this decision, establishing a bimetallic standard (gold and silver) and creating the U.S. Mint.
In the 20th century, the 1944 Bretton Woods Agreement cemented the USD’s global dominance by pegging international currencies to it. This system ended in 1971, transitioning the USD to a fiat currency backed by government trust.
USD Notes and Coins
Current Denominations:
- Notes: $1, $2, $5, $10, $20, $50, $100
- Coins: 1¢ (penny), 5¢ (nickel), 10¢ (dime), 25¢ (quarter), 50¢ (half dollar), $1
Modern notes feature enhanced security colors and tactile features for accessibility. Higher denominations (e.g., $500) were discontinued in 1969.
The USD as the World’s Reserve Currency
The USD’s status as the global reserve currency stems from:
- The Bretton Woods Agreement (1944).
- The strength of the U.S. economy and financial markets.
- Its role in 59% of foreign bank reserves (2022 data).
Despite debates on de-dollarization, the USD remains central to international trade and finance.
What Is the US Dollar Index (USDX)?
The USDX measures the USD’s value against a basket of six major currencies:
- Euro (EUR)
- Japanese Yen (JPY)
- British Pound (GBP)
- Canadian Dollar (CAD)
- Swedish Krona (SEK)
- Swiss Franc (CHF)
Established in 1973, it reflects the dollar’s global purchasing power.
Relationship Between USD and Gold
Historically, the USD was tied to gold under the gold standard. In 1971, President Nixon ended this convertibility, shifting to a fiat system where the USD’s value is market-driven.
Converting Core (CORE) to USD
Bitget’s exchange data shows the CORE/USD pair as the most popular for Core conversions. Use our cryptocurrency calculator to estimate real-time exchange rates.
FAQs
1. Why is the USD the world’s reserve currency?
The USD’s stability, U.S. economic dominance, and historical agreements (e.g., Bretton Woods) solidified its global role.
2. What countries use the USD as official currency?
Ecuador, El Salvador, Zimbabwe, and others adopt the USD alongside their local currencies.
3. How does the US Dollar Index (USDX) work?
It tracks the USD’s performance against six major currencies, providing insights into its global strength.