What is Currency?

Learn about Currencies with John Abrahim

Case breakdown: Movie Housefull 2

The scene that you saw shows Max (played by John Abrahim) telling the gang that he is ready to do the job required. Max demands money in pounds rather than in rupees.

In this blog, Learning Perspectives will explore the meaning of Currency.

What is a Currency?

Currency is a form of exchange for goods and services. It could be in the form of paper, coins that is issued and recognized by the government of the country. It is circulated within a particular country or a jurisdiction. Bitcoins came in being and are now called as virtual currency or crypto currency. Recently, India has softened its ban on virtual currencies too. Reserve Bank of India had suggested that both banks and crypto platforms need to make sure that these transactions are not used for fraudulent activities or for tax evasion.

Every country has a different currency which allows consumers of that jurisdiction to purchase goods and services. For example: Ruppes in India, Yen in Japan, Pound in United Kingdom.

History of Rupee:

History of Indian rupee dates back to the 6th century. This was first mentioned in Arthashastra (Ancient Sanskrit text written by Kautilya). Silver coins were first used as rupya-rupa (silver form). During 1540-1545, Shershah Suri issued a silver coin weighing 178 grains which was called Rupiya. Grain was a unit of measurement of mass.

During the late 18th Century paper money was introduced. Bank of Bombay was established in 1840. It issued notes which carried the vignettes of the Town Hall and others the statues of Mountstuart Elphinstone and John Malcolm.

The Paper Currency Act of 1861 conferred upon the Government of India the monopoly of note issue. This meant that no other bank can issue currency besides government of India. Government of India continued to issue currency notes till the Reserve Bank of India was established on 1st April, 1935. The motifs appearing on Indian currency notes reflect the changing socio-cultural ethos and the world-view of the times.

Currency Trading:

Currencies market or the Forex market is the largest investment market in the world. Currency is traded in pairs against currencies in this market (INR/$ US). Current value of one currency with respect to the other becomes the exchange rate. This rate keeps fluctuating due to the market conditions. These trades generally have large volumes.

References:

https://www.indiatoday.in/technology/features/story/rbi-clarification-on-bitcoin-and-cryto-trading-here-are-5-key-takeaways-1809378-2021-06-01

https://rbi.org.in/Scripts/pm_earlyissues.aspx

Written by: Ms. Gitika Chandra

 

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