Humans have been using currencies to exchange for goods and services for thousands of years. While it did take a while for paper money to catch on, today, it is the standard used around the world and has allowed for a complete revolution in the global economy. You are most likely aware that they are many different currencies in circulation around the world, and most countries use their own unique form of currency. For example, Argentina uses the Argentine Peso, South Africa uses the South African Rand, etcetera.
However, currencies vary drastically both in value and in global importance, with some being used in the financial markets far more than others. This generally is a reflection of the currency’s stability, as well as that of the economy overall in the relevant country.
The top 5 currencies in the world account for the vast majority of trade and economic activity. These powerful currencies are among the world’s most valuable, but actually, there is less overlap on those two lists than you might think. The world’s five most valuable currencies are (in order from more to less valuable) the Kuwaiti Dinar, the Bahraini Dinar, the Omani Rial, the Jordanian Dinar, and the Pound Sterling. As you can see, there is a clear trend of wealthy Gulf states possessing highly valuable currencies. However, these currencies are not much used in international trade and are very rarely traded outside of their own borders.
In terms of the most-traded currencies, these reflect the currencies with the most buying power globally, that people invest in for their stability, prestige, and perceived value. One thing that most of these currencies have in common is that they are used in multiple countries, either officially or unofficially, or have other distinct currencies that are directly pegged to their value. These currencies are:
Together, these currencies account for nearly 80% of currency trading that takes place in global markets, and all are held in large amounts by foreign governments as reserves.