Money is something people use to buy things: sellers agree to take it in exchange for what they sell. It has to do three jobs. It is a medium of exchange, a store of value and a unit of account. A store of value means money can be kept and still be worth about the same later. A unit of account lets people measure and compare the value of goods and services.

Early Lydian coins held about 55 percent gold, less than natural electrum, which suggests the Lydians refined the metal and added silver. In China, people began making imitation cowries from bone or bronze, and the cowrie became the model for one of China's oldest metal currencies.

During the Revolutionary War the Continental Congress issued paper money that quickly lost its value, which gave rise to the phrase "not worth a Continental." During the Civil War, Congress let the Treasury issue Demand Notes in 1861 to pay for the war. The term greenback was first used for the 1861 Demand Notes because of their green ink. All U.S. currency issued since 1861 remains valid and can be redeemed at full face value.

Before 1971 the U.S. had a gold standard: de facto since the 1830s and by law since 1900. From 1958, when the Bretton Woods system became operational, U.S. dollars could be exchanged for gold at a fixed $35 an ounce. In August 1971 the U.S. ended the dollar's convertibility to gold, which soon brought an end to the Bretton Woods system.

Fiat money has no metal backing: people use it because they trust that governments and central banks will not wreck its purchasing power. As of November 2026, the Bank of England is the central bank of the United Kingdom, not a high street bank, and has served the public for more than 300 years, and it prints banknotes for England and Wales that are made to be hard to forge.

The euro was launched on January 1, 1999, as an invisible accounting currency for the first three years. Euro coins and notes began on January 1, 2002, replacing national money such as the Belgian franc and the German mark at fixed rates. In 2026, euro banknotes and coins are legal tender in 21 of the 27 European Union member states, and Bulgaria was the latest to join.

Bills are printed from engraved steel plates: the portrait, scrollwork and numerals are cut as fine lines. In intaglio printing, ink in the grooves of the plate is pressed onto paper under great pressure, giving a slightly raised image. A large gold 100 on the back of the $100 bill helps people with visual impairments tell the denomination.

A bill's lifespan depends on its size: higher bills like the $100 stay in circulation longer because they are held as a store of value and change hands less often. The Federal Reserve estimates in May 2025 that a $100 bill lasts 24.0 years, a $20 bill 11.1 years and a $5 bill 5.8 years. Bills above $100 were retired in 1969 because fewer people wanted them.

In the 2025 survey of U.S. consumers, cash was 14 percent of payments and the third most-used way to pay. U.S. consumers made an average of 47 payments a month in 2025, and about six of them were cash.

Inflation is a general rise in the overall price level, not a rise in the cost of one thing, and a price index measures changes in the price of a group of goods and services. Inflation can be tracked with several price indexes, which differ in the products and the methods they use. Money works because people trust it: the money system is based on confidence.

Words to know

• intaglio: engraved printing
• fiat: unbacked money
• convertibility: ability to swap
• denomination: bill's face value
• inflation: rising prices