What is a ‘Currency?’

Currency is a tool used to measure the value of a product or service, facilitating ‘trades’ (to enable the disposal of one thing to acquire another) and enabling like-for-like comparisons between them. Basic forms of transaction may consist of bartering essentials such as food and clothes, but most exchanges are symbolic, demonstrating ‘guarantees’ of purchase value.

Theoretically, the Bank of England 'promises to underwrite the value of its paper currency and ensure the receiver gets ‘paid’ for goods and services', although in practice this is largely meaningless. The holder who presents notes to the Bank in fact has no right to anything except other pieces of paper adding up to the same face value, a situation replicated in most other countries.

The coin is the other major publicly held currency, and in most countries is a token, whose ‘face’ value is much higher than its metallic value.