Hard Currency

Written By
Paul Tracy
Updated August 5, 2020

What is Hard Currency?

Hard currency is currency that has been adopted as an acceptable payment method in multiple countries.

How Does Hard Currency Work?

Hard currencies are generally issued by developed countries that have a strong industrial economy accompanied by a stable government. The most common hard currencies include the U.K. pound sterling (GBP), the euro (EUR) and U.S. dollar (USD).

Why Does Hard Currency Matter?

Hard currencies display high stability and typically experience only minor short-term fluctuations in the foreign exchange market. Hard currencies are frequently used to denominate commodities and serve as a benchmark for foreign exchange markets. As a result, instability in hard currencies can lead to a loss in confidence with worldwide effect on markets.