Money vs. Currency — What's the Difference?
Edited by Tayyaba Rehman — By Urooj Arif — Updated on April 17, 2024
Money serves as a medium of exchange, unit of account, and store of value, while currency specifically refers to the physical form of money used in circulation.
Difference Between Money and Currency
Table of Contents
ADVERTISEMENT
Key Differences
Money is a broad concept that includes any item or verifiable record accepted as payment for goods and services and repayment of debts, whereas currency refers to the physical tokens such as banknotes and coins that are issued by a government and circulated within an economy.
Money functions as a medium of exchange, facilitating trade by eliminating the inefficiencies of a barter system, while currency acts as the physical embodiment of this concept, making transactions tangible and standardized.
As a unit of account, money provides a common measure for valuing goods and services, making economic calculation possible, whereas currency, being a physical form of money, embodies these values in daily transactions.
Money also serves as a store of value, allowing individuals to save purchasing power for future use. Currency, on the other hand, can sometimes face issues like depreciation or becoming obsolete, affecting its ability to store value over time.
The concept of money includes digital forms like bank credits and cryptocurrencies, which go beyond the physical limitations of currency, offering faster and often more secure transaction methods.
ADVERTISEMENT
Comparison Chart
Definition
Any item or record that fulfills the functions of money
Physical form of money specifically issued for circulation
Forms
Can be physical, digital, or conceptual
Strictly physical (e.g., coins, banknotes)
Functions
Medium of exchange, unit of account, store of value
Primarily medium of exchange
Durability
Can be durable (e.g., gold, digital currencies) or perishable
Generally less durable due to wear and tear
Scope of Use
Universal, can include non-physical forms
Limited to geographical boundaries of its issuing authority
Compare with Definitions
Money
Acts as a unit of account in economic transactions.
Money helps in comparing the values of different products.
Currency
Often national symbols are depicted.
The currency featured historical figures.
Money
Stores value for future use.
He saved his money for a future investment.
Currency
Legal tender issued by a sovereign authority.
U.S. dollars are an official currency in many countries.
Money
A system of value for facilitating trade.
She used money to purchase groceries.
Currency
Used for physical transactions.
He paid in currency at the local market.
Money
Can be tangible or electronic.
Online transactions use digital money.
Currency
Subject to governmental regulation and control.
The government introduced new currency to combat inflation.
Money
Any item recognized for payment of goods and services.
Money includes both coins and digital payments.
Currency
Physical money, specifically coins and banknotes.
She collected currency from each country she visited.
Money
Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The main functions of money are distinguished as: a medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment.
Currency
A currency in the most specific sense is money in any form when in use or circulation as a medium of exchange, especially circulating banknotes and coins. A more general definition is that a currency is a system of money (monetary units) in common use, especially for people in a nation.
Money
A medium that can be exchanged for goods and services and is used as a measure of their values on the market, including among its forms a commodity such as gold, an officially issued coin or note, or a deposit in a checking account or other readily liquefiable account.
Currency
A system of money in general use in a particular country
Travellers cheques in foreign currency
The dollar was a strong currency
Money
The official currency, coins, and negotiable paper notes issued by a government.
Currency
The fact or quality of being generally accepted or in use
The term gained wider currency after the turn of the century
Money
Assets and property considered in terms of monetary value; wealth.
Currency
Money in any form when in actual use as a medium of exchange, especially circulating paper money.
Money
Pecuniary profit or loss
He made money on the sale of his properties.
Currency
Transmission from person to person as a medium of exchange; circulation
Coins now in currency.
Money
One's salary; pay
It was a terrible job, but the money was good.
Currency
General acceptance or use; prevalence
The currency of a slang term.
Money
An amount of cash or credit
Raised the money for the new playground.
Currency
The state of being current; up-to-dateness
Can you check the currency of this address?.
Money
Often moneys, monies Sums of money, especially of a specified nature
State tax moneys.
Monies set aside for research and development.
Currency
Money or other items used to facilitate transactions.
Wampum was used as a currency by Amerindians.
Money
A wealthy person, family, or group
To come from old money.
To marry into money.
Currency
Paper money.
Money
A legally or socially binding conceptual contract of entitlement to wealth, void of intrinsic value, payable for all debts and taxes, and regulated in supply.
Currency
The state of being current; general acceptance or recognition.
The jargon’s currency.
Money
A generally accepted means of exchange and measure of value.
I cannot take money, that I did not work for.
Before colonial times cowry shells imported from Mauritius were used as money in Western Africa.
Currency
(obsolete) Current value; general estimation; the rate at which anything is generally valued.
Money
A currency maintained by a state or other entity which can guarantee its value (such as a monetary union).
Money supply;
Money market
Currency
(obsolete) fluency; readiness of utterance
Money
Hard cash in the form of banknotes and coins, as opposed to cheques/checks, credit cards, or credit more generally.
Currency
A continued or uninterrupted course or flow like that of a stream; as, the currency of time.
Money
The total value of liquid assets available for an individual or other economic unit, such as cash and bank deposits.
Currency
The state or quality of being current; general acceptance or reception; a passing from person to person, or from hand to hand; circulation; as, a report has had a long or general currency; the currency of bank notes.
Money
Wealth; a person, family or class that possesses wealth
Currency
That which is in circulation, or is given and taken as having or representing value; as, the currency of a country; a specie currency; esp., government or bank notes circulating as a substitute for metallic money.
Money
An item of value between two or more parties used for the exchange of goods or services.
Currency
Fluency; readiness of utterance.
Money
A person who funds an operation.
Currency
Current value; general estimation; the rate at which anything is generally valued.
He . . . takes greatness of kingdoms according to their bulk and currency, and not after intrinsic value.
The bare name of Englishman . . . too often gave a transient currency to the worthless and ungrateful.
Money
A piece of metal, as gold, silver, copper, etc., coined, or stamped, and issued by the sovereign authority as a medium of exchange in financial transactions between citizens and with government; also, any number of such pieces; coin.
To prevent such abuses, . . . it has been found necessary . . . to affix a public stamp upon certain quantities of such particular metals, as were in those countries commonly made use of to purchase goods. Hence the origin of coined money, and of those public offices called mints.
Currency
The metal or paper medium of exchange that is presently used
Money
Any written or stamped promise, certificate, or order, as a government note, a bank note, a certificate of deposit, etc., which is payable in standard coined money and is lawfully current in lieu of it; in a comprehensive sense, any currency usually and lawfully employed in buying and selling.
Currency
General acceptance or use;
The currency of ideas
Money
Any article used as a medium of payment in financial transactions, such as checks drawn on checking accounts.
Currency
A current state of general acceptance and use
Money
Any form of wealth which affects a person's propensity to spend, such as checking accounts or time deposits in banks, credit accounts, letters of credit, etc. Various aggregates of money in different forms are given different names, such as M-1, the total sum of all currency in circulation plus all money in demand deposit accounts (checking accounts).
Currency
The property of belonging to the present time;
The currency of a slang term
Money
In general, wealth; property; as, he has much money in land, or in stocks; to make, or lose, money.
The love of money is a root of all kinds of evil.
Money
To supply with money.
Money
The most common medium of exchange; functions as legal tender;
We tried to collect the money he owed us
Money
Wealth reckoned in terms of money;
All his money is in real estate
Money
The official currency issued by a government or national bank;
He changed his money into francs
Common Curiosities
Is all currency considered money?
Yes, all currency is considered money, but not all money is currency as it also includes digital and other non-physical forms.
Why do countries have their own currencies?
Countries issue their own currencies to have control over their monetary policies, which helps in managing economic stability and growth.
How do people use money that isn't currency?
Non-currency money, like bank deposits or electronic money, is used for digital transactions, online purchases, and electronic funds transfers.
Can currency lose its status as money?
Yes, if a currency is no longer accepted for transactions or loses legal tender status, it can cease to function as money.
How does inflation affect money and currency?
Inflation erodes the purchasing power of money, including currency, making it less effective as a store of value.
What are the security features of modern currency?
Modern currencies include various security features like watermarks, security threads, and holograms to prevent counterfeiting.
What happens when a country demonetizes its currency?
Demonetization involves stripping a currency of its status as legal tender, often to curb illegal activities or introduce new currency forms.
What is the role of banks in the circulation of money and currency?
Banks help in the distribution of currency and also create money through the lending process, influencing money supply and economic conditions.
Why might digital money be preferred over traditional currency?
Digital money offers convenience, reduced transaction costs, and enhanced security features, appealing to a tech-savvy global audience.
What are the implications of counterfeiting currency?
Counterfeiting currency undermines economic stability, reduces the value of real money, and is punishable by law.
What is the difference between devalued currency and depreciated currency?
Devaluation is a deliberate policy to reduce a currency’s value in a fixed exchange rate, whereas depreciation is a decrease in currency value due to market forces in a floating rate system.
What ensures the value of currency?
The value of currency is generally backed by the trust in the issuing government and its ability to maintain economic stability.
How do exchange rates affect currency?
Exchange rates determine the value of one currency relative to another and can influence international trade and economic decisions.
Share Your Discovery
Previous Comparison
Okayish vs. Okay
Next Comparison
Puzzle vs. QuizAuthor Spotlight
Written by
Urooj ArifUrooj is a skilled content writer at Ask Difference, known for her exceptional ability to simplify complex topics into engaging and informative content. With a passion for research and a flair for clear, concise writing, she consistently delivers articles that resonate with our diverse audience.
Edited by
Tayyaba RehmanTayyaba Rehman is a distinguished writer, currently serving as a primary contributor to askdifference.com. As a researcher in semantics and etymology, Tayyaba's passion for the complexity of languages and their distinctions has found a perfect home on the platform. Tayyaba delves into the intricacies of language, distinguishing between commonly confused words and phrases, thereby providing clarity for readers worldwide.
