Cash in U.S. dollars (USD)

History of the American dollar

The first national currency of the United States of America appeared in 1792 as an analogue of the Spanish dollar. In the same year, the administration of the 1st President of the United States, George Washington, issued and signed the Coinage Act, establishing the American dollar as legal tender.

After the passage of this law, Congress established a mint in Philadelphia. The first U.S. bank was launched a year before the U.S. dollar was created. The new currency spread widely across America in the 16th and 19th centuries and was used for payment along with Spanish and Mexican silver dollars.

Gradually, the dollar began to spread outside the United States, but until the twentieth century, the British pound (GBP) was more popular worldwide. In 1900, the gold standard was adopted. After its adoption, the American dollar became backed by gold. In other words, any citizen could go to a bank and be guaranteed to exchange their notes for gold at a fixed rate.

In 1913, President Wilson signed a law creating the Federal Reserve System (FRS) of the United States, which fulfills the functions of a central bank: it is responsible for issuing coins and banknotes, regulates banking institutions, sets the interest rate to control inflation, and so on.

The gold standard was suspended twice and finally canceled in 1971. Since then, the dollar has remained a fiat or fiduciary currency, meaning it is not backed by anything. The U.S. dollar is freely quoted on the market, but over the past 100 years, the purchasing power of the dollar has fallen by more than 15.

Coins and banknotes

Like most other national currencies, U.S. dollars come in the form of coins and banknotes. A dollar is divided into 100 cents. The name "dollar" itself comes from the then-common European currency unit "thaler", and "cent" comes from the Latin word "centum", which means "hundred".

Currently, coins are issued in denominations of 1, 5, 10, 25, 50 cents and 1 dollar. Each coin depicts a famous person on the obverse side who has made a significant contribution to the development of the United States, and on the reverse side — symbols or landmarks of importance to the country. Various U.S. coins depict the following:

• 1 cent: the sixteenth president of the United States, Abraham Lincoln, and the shield symbolizing the United States;
• 5 cents — the third president, Thomas Jefferson, and his Monticello estate in southern Virginia;
• 10 cents — thirty-second President Franklin D. Roosevelt and the olive branch, torch, and oak branch as a symbol of unity;
• 25 cents — one of the founding fathers and the first popularly elected president in American history, George Washington, and the White-headed Eagle, the heraldic symbol of America;
• 50 cents — thirty-fifth U.S. President John F. Kennedy and the White-headed Eagle;
• 1 dollar — holding a child, the Lewis and Clark Sacagawea Expedition helper and the Soaring Eagle as a symbol of freedom.

The first banknotes, printed as early as 1776, were called "green backs" (green backs) by Americans because of their inherent green colour, hence their slang name "quid."

There are notes of 1, 5, 10, 20, 50 and 100 dollars in circulation. As in the case of coins, the front side has a portrait of a famous person, and the other side has a culturally significant object:

• One dollar — George Washington and a state emblem called the Great Seal of the United States ;
• Two dollars — Thomas Jefferson and a reproduction of John Trumbull's painting "Declaration of Independence";
• Five dollars — Abraham Lincoln and his memorial;
• Ten dollars — American statesman and politician Alexander Hamilton and the U.S. Treasury Department building;
• Twenty dollars — seventh U.S. President Andrew Jackson and the White House;
• Fifty dollars — eighteenth president Ulysses S. Grant and the Capitol;
• One hundred dollars — one of the founding fathers of the American state, Benjamin Franklin and Independence Hall.

There are also occasional rare 500, 1,000, 50,000 and even 10,000 dollar notes featuring Supreme Court Chief Justice John Marshall and other former U.S. presidents William McKinley, Grover Cleveland and James Madison.

The currency's place in the world economy

The dollar is known to act as the main unit of payment of the United States and as one of the world's leading reserve currencies. Many imported and exported goods worldwide are paid for in U.S. dollars. Because of this, prices in several countries rise strongly if their national currency becomes cheaper than the USD.

Due to the lack of restrictions on USD issuance, the currency can be highly subject to inflation: when there is too much money in circulation, the demand starts to exceed the supply on the market, which leads to shortages and, consequently, rising prices.

In the last 3 years alone, the U.S. has printed as much money as in the 40 years before that — 5.9 trillion USD or 38% of all existing dollars. The Fed resorted to such a measure amid the crisis caused by the pandemic in 2020.

In addition, every day, the U.S. issues about 35 million banknotes of various denominations totalling $635 million. However, according to money printing organizations, 95% of all notes issued go to replace worn-out banknotes.

The inflation rate can be reduced by raising the key rate or withdrawing some banknotes from circulation. Putting additional money into circulation may aggravate the crisis even more, so it is risky to resort to it.

Inflation has been and remains the main enemy of fiat currencies. The number of dollars on the market only increases: the U.S. Federal Reserve can issue unlimited money, leading to even more inflation. If the inflation rate rises too fast, the Federal Reserve may raise the key rate, resulting in higher interest rates on deposits and loans.

Such a measure will increase citizens' interest in deposits and, at the same time, will force them to take fewer loans as they become less favourable due to the increased interest rate. As a result, the demand for goods or services also falls, which can lead to deflation — when the amount of currency in circulation becomes less, and sellers are forced to reduce prices to stay afloat. Inflation and deflation must be moderate, otherwise, they can lead to a global crisis, the effects of which will last for years or even decades.

U.S. dollar exchange rate

Currencies are usually priced in U.S. dollars, so the dollar is also traditionally compared to the local currency exchange rate. As of November 2023, the USD exchange rate was 0.93 EUR, 0.82 GBP, 7.33 CNY.

Looking at the overall statistics, the USD has appreciated against most other currencies over the past 10 years, indicating an ever-increasing demand despite the huge scale of U.S. money printing.

But it also plays a negative role in the economies of different countries, so because of the growing dollar exchange rate, the prices of many imported goods, including natural resources, without which you can not do without.

How to get cash in dollars

• Open a foreign currency account at your bank, if possible, buy dollars for local currency and withdraw dollars from an ATM;
• Purchase cash dollars at a local bank branch;
• Open a dollar account abroad;
• Open an EPS wallet, such as PayPal. With its help, you can buy and withdraw USD in different ways;
• Buy USD from a broker, withdraw to your account and then cash;
• Use the services of online or offline exchangers;
• Exchange goods and services for dollars. Note that not every country can do this legally,
• Through acquaintances and relatives abroad. They can help you get cash dollars if you don't have your bank account;
• Sell stocks, cryptocurrency or other assets for cash.