The US dollar (USD) is the official currency of the United States of America and is the most widely used currency in the world. Outside the US, the greenback (nicknamed after the main colour in which the notes are printed) is also the official currency in Ecuador, Palau, Timor East, Panama and the Federal States of Micronesia.

The dollar has been in use since 1785 and has been printed since 1929 by the Federal Reserve, which started issuing money during the war of American independence (1862) supported by the Spanish dollar. One side of the banknotes was green to distinguish them from the dollars printed by the European colonial power. Since then, this colour was retained for the sake of tradition but since 2003 the 20 dollar note has been made in various colours to combat the increase in counterfeiting.

The hegemony of the dollar over other currencies was endorsed in 1944 by the international agreements made at Bretton Woods, which also set up the International Monetary Fund and under which the US undertook to make the dollar convertible into gold at 35 dollars an ounce, while the other signatory nations had to fix their exchange rates with respect to the US currency. For every 35 dollars in circulation, one ounce of gold was deposited in the vaults of Fort Knox and anyone could ask to have banknotes converted into gold.

On 15th August 1971, Richard Nixon abolished the total convertibility of the dollar into gold, thus terminating the Bretton Woods system, because of the enormous expense of the war in Vietnam, which was forcing the US to print such a mass of paper money that it could no longer ensure its convertibility into gold. In spite of the non-convertibility into gold, the greenback continued to be the world’s main reserve currency: 51% of the world’s foreign currency reserves are in the form of banknotes printed by the “Fed”.

The symbol usually used to indicate the US dollar in writing is $.