The US Dollar is the official currency of the United States of America. The history of the Dollar is as exciting as the development of America. We explain everything about the characteristics, uses, Dollar rates, and the development of the most famous currency in the world.
The United States Dollar (USD, symbol: $), often abbreviated as US Dollar, is the currency of the USA. In addition to the banknotes, which already exist from a value of one Dollar, there are also Dollar coins.
One US Dollar is divided into 100 US Cents (symbol: ¢). There are coins in the currency sizes 1 Cent, 5 Cents, 10 Cents, 25 Cents, 50 Cents, and 1 Dollar. Other subdivisions of the Dollar are "10 Dime" (i.e., 10x10 Cents) as well as 1000 Mill (symbol: ₥).
American coins are denominated in units of $0.01, $0.05, $0.10, $0.25, $0.50, and $1. Common American Dollar bills are $1, $2, $5, $10, $20, $50 and $100.
In addition, $500, $1,000, $5,000, and $10,000 bills are also in circulation, but are used less frequently.
US Dollar bills are often referred to as "Greenback," as almost all of them have green shading on the back or at least many green elements. The $100,000 bill is an exception to this, but it cannot be legally owned.
The motto "E Pluribus Unum" (meaning "one from many") has been on all coins and bills in the USA since 1786. A few decades later, in 1873, with the implementation of the Coinage Act of 1864, the inscription "In God We Trust" was added to the two-cent piece.
The front of all Dollar bills is decorated with the head of a politician, while the back usually shows a building or the value of the bill as a large number. The US presidents and political figures on current US dollar bills are:
| US Dollar bill | Politican |
|---|---|
| 1 US Dollar | George Washington |
| 2 US Dollar | Thomas Jefferson |
| 5 US Dollar | Abraham Lincoln |
| 10 US Dollar | Alexander Hamilton |
| 20 US Dollar | Andrew Jackson |
| 50 US Dollar | Ulysses S. Grant |
| 100 US Dollar | Benjamin Franklin |
| 500 US Dollar | William McKinley |
| 1,000 US Dollar | Grover Cleveland |
| 5,000 US Dollar | James Madison |
| 10,000 US Dollar | Salmon P. Chase |
| 100,000 US Dollar | Woodrow Wilson |
The Dollar coins bear the faces of Abraham Lincoln, Thomas Jefferson, Franklin D. Roosevelt, George Washington, and John F. Kennedy.
In the USA, new versions of dollar coins are constantly being released. Often, these are anniversary and commemorative coins. The most famous are:
Since 1999, there are Quarters as commemorative coins in the USA. On the obverse of the "50 State Quarters" is a modified image of George Washington. On the reverse are motifs of the individual states.
The One-Dollar coin featuring Susan B. Anthony was introduced in 1979 but proved to be very unpopular. The unusual angular shape was met with skepticism.
In addition, the coin was the same color and size as the Quarter, which led to confusion. Regular minting of this Dollar coin was discontinued again in 1980. There were special mintages in 1981 and 1999.
In 2000, a new attempt was made to establish a One-Dollar coin with the image of a woman. This new coin with Shoshoni Sacagawea is golden and therefore easily distinguishable from the other coins. Nevertheless, this coin was not accepted by the US either. However, in Ecuador, it is very common because the Sacagawea portrait resembles an Ecuadorian highland indigenous woman.
On February 15th, 2007, the third generation of a gold One-Dollar coin, namely the "Presidential Dollar," was introduced. It features the Statue of Liberty on the value side and the face of a deceased US president on the obverse side.
Both the American Dollar notes and the coins of the US currency have affectionate and sometimes legendary nicknames in daily payment transactions. Often, a Dollar is referred to as a "Buck" (e.g., "That's 50 Bucks!"). Other names are:
| US Dollar bill | Nickname |
|---|---|
| 1 Dollar bill | Single |
| 2 Dollar bill | Deuce |
| 5 Dollar bill | Fin oder Fiver |
| 10 Dollar bill | Sawbuck |
| 20 Dollar bill | Double sawbuck |
| 100 Dollar bill | Large |
| 1000 Dollar bill | Grand or "G" |
Sometimes, the bills are also referred to by the names of the people depicted, such as "George," "Tom," or "Frank." The term "Greenback" is also often used in everyday conversation.
The various Dollar coins have nicknames that you've probably seen in US movies. These include:
| US Dollar coin | Nickname |
|---|---|
| 1 Cent | Penny |
| 5 Cents | Nickel |
| 10 Cents | Dime |
| 25 Cents | Quarter |
| 50 Cents | Half Dollar |
| 1 Dollar | Buck |
The US Dollar is produced by the Bureau of Engraving and Printing (banknotes) and the United States Mint (minting).
You will find the US Dollar not only in America but also in the British Virgin Islands, Ecuador, El Salvador, Panama, Cambodia, Micronesia, the Marshall Islands, Palau, and East Timor.
In some of these countries, the US Dollar is the unofficial secondary currency and is accepted as payment in stores or hotels. The Dollar is freely convertible, i.e., it may be exchanged for other currencies by nationals and foreigners without limit.
In normal payment transactions, the coin is still rather rare and is not accepted by all stores as a means of payment. Many Americans nowadays prefer to use credit cards for cashless payments anyway.
Commodity trading on the world market is conducted in dollars. This is how the term "Petrodollar" came into being in the course of the international petroleum trade after the Second World War.
Countries in the Middle East such as Saudi Arabia, Iraq, Iran, but also states such as Russia, Venezuela, or Nigeria have particularly strong revenues from the "Petrodollar."
The introduction of a single currency in the form of paper in the USA was completed in 1690. This was not easy because the many European colonies had to find an agreement that satisfied all interests.
The English colonies, in particular, had a strong presence on the East Coast at this time. However, the British Pound was not recognized as a means of payment, and there were also different currencies for trade within the colonies.
In addition, there were other problems:
In the 17th century and early 18th century, barter was conducted in corn, tobacco, and Indian shell money (wampum). Coinage was also not unknown in seven colonies at this time.
The problem was that the value of the minted coins varied, and by minting their own, the colonies were violating the prevailing English law. This stated that the right to mint was only allowed to the English king and parliament.
An upswing of the American economy and the resulting independence were to be prevented by the prohibition of minting. In 1704, the minting of coins was therefore finally prohibited.
Foreign money (from the Netherlands and Spain, among others) became the means of payment for Americans and facilitated trade between and within the colonies.
In this context, the name "Dollar" was created, which comes from translating the word "Thaler." The minting of South and Central American "Dolares," which the English called "Spanish Dollar," eventually gave rise to the unofficial name of the American currency.
The colonists also created their own currency during the American War of Independence to emphasize their self-sufficiency. Thus, then-President Thomas Jefferson initiated the further subdivision of the new Dollar into 100 Cents, which was considered a clear sign of the independence of the American currency.
A single currency still did not exist because other countries (e.g., England) subdivided their currency differently, making payment transactions more difficult.
The first American Cent coin was minted in the USA in 1787. Shapes were also given to the Quarter, the Half Dollar, and the Dollar and Dimes (tenths of a dollar). These coins were made of silver and copper, but the higher value "Eagles" (10 dollars) were made of gold.
In fact, it was not until the late 19th century that the first paper Dollar bills came into circulation, which depicted portraits of famous Americans, bore the seal of the Treasury Department, and were thus more difficult to counterfeit.
In the 19th century, the development of the Dollar was very different. It went through periods of growth and economic crises. Due to the strong immigration flows in the USA because of the gold rush and other things, the economy recovered time and again.
Since the end of World War II, the US Dollar has been the world's reserve currency. It thus replaced the British Pound as the leading currency on the markets. This meant that oil, gold, and cotton were only paid for in Dollars.
The current exchange rate of the US Dollar is:
The US Dollar reached its all-time low on July 15th, 2008, with a Euro exchange rate of 1.5990 Dollars. Since the introduction of the Euro, the historic high for the US Dollar was recorded on October 26th, 2000, at $0.8252.
In 2003, US Dollar transactions accounted for 50 percent of foreign exchange transactions, compared to 25 percent in Euros and 10 percent each in Pounds Sterling and Japanese Yen.
We bet you didn't know these fun facts about the American currency:
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