Denomination (currency)
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Denomination is a proper description of a
Subunit and super unit
In a currency, there is usually a main unit (base) and a subunit that is a
Occasionally, a super unit is used as a multiple of the main unit. Examples include Korean won = 5 yang in 1893, Iranian toman=10 rials (used informally today). In the Ottoman Empire, lira and kuruş were super units at some point before becoming the main unit.
In the Indian subcontinent, it is common in Hindustani, as well as in both Indian and Pakistani English for large amounts of money to be discussed in lakhs and crores rather than in rupees. While they are not official denominations, they are drawn from the customary numerical system and are widely understood and utilised in the Indian, Pakistani, and Nepalese financial systems.
Decimal vs. non-decimal
A
In theory, two countries currently use non-decimal currency: Mauritania (1 ouguiya = 5 khoums) and Madagascar (1 ariary = 5 iraimbilanja). In practice, however, the value of the main unit in each case is so low (less than 1/1000 of a United States dollar) that the sub-unit is not of any practical use and is rarely seen in circulation. In the case of the iraimbilanja, this is a carryover of the Madagascar's previous currency, the Malagasy franc, which had the ariary as a super unit worth 5 francs, and iraimbilanja was an alternate term for the franc. The last major countries to use non-decimal currencies in practice were the United Kingdom (until 1971), Ireland (1971), Malta (1972) and Nigeria (1973).
The "optimal denomination problem"
Display on coins
Traditionally, denomination was not displayed on coins, although names of coins (such as drachma, ass, sestertius etc.) were used both in colloquial and official language. It was only in the 1600s that Scandinavian coins began to display relative value to the smaller units (8, 16 skilling etc.) because there were many of them in circulation.
The monetary reform of Peter the Great in the Russian Empire not only established a strictly decimal monetary system (which was rather uncommon in other states back in those times) but made the display of denomination (the "face value") mandatory on all coins. By the end of the 18th century denomination appeared on most coins in Europe and the Ottoman Empire, and in the 19th century it became a common practice.
By the end of the 20th century, coins were mostly distinguished from medals or tokens by presence of denomination, either in monetary units or (for commemorative or bullion coins only) in the weight of a valuable metal. Exceptions are quite rare: for example, British commemorative crowns (or 25 pence coins after the decimal reform) traditionally do not display any face value, and are only recognized as such due to their typical size.
Choice of name
It is common to name a unit with a
See also
References
- ^ A law of the abolition of currencies in a small denomination and rounding off a fraction, 15 July 1953 Law No.60 (小額通貨の整理及び支払金の端数計算に関する法律, Shōgakutsūka no seiri oyobi shiharaikin no hasūkeisan ni kansuru hōritsu))
- ^
J. Shallit (2003). "What this country needs is an 18c piece" (PDF). S2CID 123286384.