US dollar.
Today America is proud of its currency, but there was a time when the biggest currency crisis was seen here. The circumstances were such that payment was made in gold and silver items. British and Spanish coins started being used. Then a time came when the shortage of gold and silver started increasing. After this the question arose that the country should have its own currency. Efforts to lay the foundation of currency from a legal perspective began.
To bring currency into existence, the American Congress (Parliament) passed the Coinage Act on April 2, 1792. After the legal approval, Mint started in America. America’s currency appeared, but it was made of silver. In this way the trend of dollar currency made of silver started.
Silver currency was made, still in bad condition
That was a time when people used to take silver from their homes to the mint and get it minted into coins. The purpose of the currency related law was to reduce the problems of the people, but the law failed to live up to the expectations. The objective of the law was to make buying and selling easier, but this could not happen. Very few silver coins were minted. Their arrival in the market was not much. In view of this, local banks in America started their own currency.
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After the introduction of silver currency, the currency crisis did not end completely. The crisis of silver shortage started deepening. To overcome the shortage of silver, an effort was started to find a solution which ended with paper currency. In the year 1861, the American Congress decided to issue paper currency as a solution to this problem.
Paper currency called demand notes
The government issued paper currency. This was called demand notes. It started being used for payment during the Civil War. Initially notes of $5, $10 and $20 were printed. These were called green boxes, because the color was printed on the back side of such notes. This feature was related to security so that people could not print fake notes.
A green layer of a special type of chemical was made on the dollar. Later many changes were made in it so that it could be made a secure currency. However, the standard system of printing of these notes was first prepared in the year 1869.
The decision that became the turning point
In 1944, the US dollar was recognized as a world currency for the first time through the Bretton Woods Agreement. This decision became a turning point for the American currency. After this agreement, 44 countries decided that their currencies would be linked to the dollar. Gold will be linked to the dollar. However, in 1970, the gold standard was removed from the dollar and price fluctuations were permitted. Now let us understand how the impact of the Bretton Woods Agreement was seen.
After this agreement, most of the countries joined the dollar. Countries started keeping dollars in their foreign exchange reserves. Later, the dollar was also at the center of institutions like IMF and World Bank. Be it international debt or finance, dollar will be given priority. The dollar started being used rapidly in trade. After this it created history. The petrodollar system of the 1970s took it to new heights. Oil started being sold only in dollars. In this way the demand for dollars never ended.
Now that America is keeping an eye on other countries, the dollar is also being discussed again and again. After Venezuela, Trump is trying to control Greenland. Relations with Iran have already deteriorated. Amidst all these developments, it will be interesting to see what records the US dollar will make.
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