Posted by Allison on 6 April 2009, 15:12
Most of us have gone online at some point or another to check on an exchange rate prior to going on holiday to a different country. You will no doubt have noticed that every single currency listed on these sites is represented by three letters – a kind of shortened version of the name of the currency itself, along with the country it is primarily used in. This is what is known as its currency code.
For example, the Japanese yen is known by the letters JPY; the British pound is known by the letters GBP (for Great British Pound) and the American dollar is recognisable by the letters USD. This is essentially a kind of shorthand for every currency in the world. The currency code is also known as the ISO 4217 code, which itself is short for International Organisation for Standardisation (although the letters obviously don't occur in the same order as they appear in their shortened version).
This organisation created the currency codes so that they would be the same and thus recognisable in every country in the world. The organisation is also responsible for creating many other world standards in various different fields. In many cases the three letters are split into two separate sections. The initial two letters relate to the country, and the last letter is a sign of the currency being used.
These codes are so ingrained into the world of currency that it is somewhat surprising to learn that they have only been around for a relatively short time – thirty five years to be exact, since their inception in 1973. Given the ever changing landscape of currency as a whole it is obvious that the currency codes themselves are also constantly in a state of flux. As old currencies are ditched (usually in favour of others, such as the Euro for example) new ones take their place, and these need their own brand new currency code so they are recognised on the world stage.
But there is also another set of characters by which a currency can be recognised, and they are the characters which are seen alongside a particular figure when it is written down or displayed anywhere. For example the dollar uses the $ symbol and the pound uses the £ symbol. Every currency has its own variation of a symbol that represents it and therefore makes it clear what you are looking at when you see a price written down. Some shops display prices in more than one currency; an example of this is in the French hypermarkets, where the prices are often given in pounds as well as Euros.
But how do these signs come into being? Are they designed by someone when the currency is first created? Or do some of them have deeper meanings that make sense to us when we delve back into history?
One universally recognised symbol is the dollar sign, which appears as $. There have been several explanations for how the dollar sign came into being; one of these related to the fact that the dollar was really derived from the Spanish pesos. When pesos was written down in plural it was written as ps, and over time as this was written more quickly the long stroke of the p became part of the s, hence giving us the $ sign. Another explanation is that it actually represents America itself. When we write the dollar sign down it usually has two downward strokes cutting through the s. These represent the U of United, and the s obviously stands for the States. Interesting theory – but is it right? The chances are we will never know the definitive reason, for there are other suggestions as well.
Let's look at some other symbols of currency – the pound sign, or £, for instance. If you take the horizontal line away you'll see the symbol looks rather like the capital L, which represents a unit of weight that Romans used – the librum. A pound in weight also relates to how much silver was used in a certain amount of coinage, and hence both the name and the symbol were eventually born.
The sign for the newer Euro currency is rather more convoluted however. Apparently the E stands for Europe, but it is also a reference to the letter epsilon from the Greek alphabet, so it is also a nod back to the history of Europe in a big way. And as for the two bars crossing the E, this is supposedly to indicate how stable the Euro is as a currency. Since these horizontal bars became part of the design before the Euro was even launched, it is clear that the powers that be had great aspirations for what would be one of the world's biggest currencies; it certainly had a lot to live up to.
But while these three big world currencies do have specific symbols which relate to them, not all currencies work in the same way. On other occasions the initial letter of the currency will be capitalised and seen next to the amount, such as the case with Indian rupees. In India you will usually see prices listed as 2Rs or Rs2, depending on the preference of the person writing them down. Either way is correct.
So you see history has a large role to play when it comes to currency signs and symbols. But in the end they are all there for the same reason. They are all intended to make life easier for us when writing down amounts of money in a certain currency, or to see at a glance which currencies we need to be looking at when working out an exchange rate online.
While some currency symbols are older than others – and for some their inception is somewhat shrouded in mystery – one thing remains clear. Once put into practice they tend to be recognisable to the vast majority of people on the planet.