United States dollar

The United States dollar is the official currency of the United States. It is also used as the official currency in several other countries. Many nations use it for international transactions. In some places, like Cambodia, it serves as the de facto currency. This means people use it for daily life even if it is not the official national money.

The dollar is a free-floating currency. This means its value is determined by the global market.

The United States Constitution gives Congress the power to coin money. This authority is now organized under Title 31 of the U.S. Code. This law explains how dollars should be issued. The Federal Reserve System acts as the nation's central bank. It conducts the monetary policy for the United States.

The system manages how much money is in circulation. As of January 1, 2025, the Federal Reserve estimated the total currency in circulation was approximately $2.3 trillion.

There are two main forms of the dollar: coins and banknotes. Banknotes are called Federal Reserve Notes. People often call them "greenbacks" due to their green color.

Generally, denominations of one dollar or less are issued as coins. Denominations larger than one dollar are issued as Federal Reserve Notes. However, there are historical exceptions. For example, gold coins worth up to $20 were issued for circulation until the 1930s. These were known as double eagles.

The dollar uses a decimal system for its smaller units. This system was established by the Coinage Act of 1792. One dollar is divided into 100 cents. The cent is the only decimal unit used in everyday life. Other historical units included the mill, which is one-thousandth of a dollar. The dime represents one-tenth of a dollar.

The eagle was a term used for ten dollars. This unit was used in the 1792 Act and for naming gold coins. Today, the dime is mostly known as the name of the ten-cent coin.

The history of the dollar is tied to precious metals. In 1792, the dollar was part of a bimetallic standard. This meant it was linked to both silver and gold. It was originally defined by 0.7734375 troy ounces of fine silver. In 1834, the standard included gold at $20.67 per troy ounce.

The Gold Standard Act of 1900 changed this. It linked the dollar solely to gold. In 1934, the value was revised to $35 per troy ounce of gold. All links to gold were finally repealed in 1971.

The word "dollar" has deep linguistic roots. It likely comes from the German word "taler." This word comes from "joachimstaler," coins minted in a Bohemian valley. The name referred to the valley of Saint Joachim.

The Spanish milled dollar was also very important. It was an eight-real coin used widely in the New World. The dollar symbol, $, may have evolved from the abbreviation "ps" for the Spanish peso. It might also come from the Pillars of Hercules on Spanish coins.

People use many nicknames for different dollar amounts. A $1 bill is often called a "buck." A $5 bill is sometimes called a "fiver" or "Lincoln."

A $20 bill is sometimes called a "Jackson." A $100 bill is often called a "Benjamin" after Benjamin Franklin.

Large amounts of money, such as $1,000, are often called a "grand." These nicknames help people communicate quickly in casual settings.

The U.S. dollar has a massive global impact. After the First World War, it became an important international reserve currency. By the end of the Second World War, it displaced the British pound sterling. This shift happened because of the Bretton Woods Agreement.

Today, the dollar is the most widely used currency for international trade. It serves as a primary tool for the global economic system.