Currency is the medium of exchange for goods and services which is an important element of a country. Just like a standard exchange currency is used inside a country, international trade is also done by accepting a common currency worldwide. For most of the international transactions currencies like the US dollar, euro and yen are acceptable everywhere. These are the most popular currencies in the world. Among all these, the US dollar is the most popular currency.
US dollar makes up about 62 per cent of all known central banks foreign exchange reserves. US dollar doesn’t hold any official title but due to the fact that most of the central banks hold their foreign reserves in the form of the US dollar makes it the de facto global currency. Almost 40% of the debt issued in the world is in dollars.
The second closest reserve currency is Euro. Nearly 21% of globally known countries hold their foreign reserves in euros. As the eurozone crisis is declining, the chances of the euro becoming world currency are increasing.
Thirdly, Chinese currency which is called yen, locally called renminbi, is another popular currency in the world. China wants its currency to be fully traded on global scales. According to the IMF, the world central banks held renminbi about $193 billion worth in the third during the third quarter of 2018.