Under the world currency in the Forex market and in the financial markets, it is customary to mean a means of payment with which the maximum volume of international settlements is made. Some of the world's reserve currencies are dominant.
Economists from different countries agree that currencies that circulate in many territories, as well as are chosen by a number of states as reserve ones, can be considered global means of payment. Today there are five such currencies.
Liquid world currencies
One of the most important features of the world currency is its liquidity and convertibility. This means that it can be easily exchanged for a means of payment of any other country, moreover, the loss of a client transferring his own funds from the world currency to the national one will be minimal. Most of the settlements under contracts are carried out in world currencies.
Now, most international agreements provide for payment for goods or services in US dollars (USD), and it is this currency that is assigned one of the leading places in the world. In addition, some other world currencies are well known.
Euro (EUR) is a means of payment of the EEC countries. Having inherited the status of a world currency from the Deutsche Mark, since 1999 the euro has been an official means of payment for several dozen states of the Eurozone, the number of which is steadily increasing. In recent years, due to the financial crisis, the euro exchange rate has been unstable, but its share in the gold and foreign exchange reserves of Russia and other countries is only increasing.
The British pound sterling (GBP) has always been distinguished by its reliability and exchange rate stability. That is why long-term international contracts are often concluded in this currency, and experienced traders usually use it to hedge their currency risks.
The Swiss franc (CHF) is the currency of a country that is one of the largest banking centers in Europe. Traditionally, high confidence in this currency is due to its high level of gold backing, as well as the long-term stability of the exchange rate.
The Japanese yen (JPY) is one of the most popular currencies in Asian countries. The exchange rate is unstable, its fluctuations are often smoothed out by the government through emission or participation in trading on foreign exchange markets. The Japanese yen is widely used in payments for high-tech equipment, computers and household appliances, cars.
Electronic world currencies
The development of progress brings to life new means of payment. Traditional currencies may soon give way to more "advanced" money. In particular, the emergence of electronic gold - bitcoin - caused a lot of noise among Internet users and made central banks of different countries pretty nervous. The bitcoin rate has grown thousands of times over several years, and the volume of transactions made with it is simply amazing.
Millions of users around the world have believed in a payment system built on the basis of bitcoins. Despite the fact that the governments of some countries seek to restrict settlements with these quasi-money in their territories, the bitcoin rate continues to grow, and the currency itself is becoming even more attractive to investors.
