Information and communications technology

From Wikipedia, the free encyclopedia

Information and communication technology (ICT) is another/extensional term for information technology (IT) that stresses the role of unified communications and the integration of telecommunications (telephone lines and wireless signals), computers as well as necessary enterprise software, middleware, storage, and audio-visual systems, which enable users to access, store, transmit, and manipulate information.

The term ICT is also used to refer to the convergence of audio-visual and telephone networks with computer networks through a single cabling or link system. There are large economic incentives (huge cost savings due to elimination of the telephone network) to merge the telephone network with the computer network system using a single unified system of cabling, signal distribution and management.

However, definition, as "the concepts, methods and a involved in ICT are constantly evolving on an almost daily basis." The broadness of ICT covers any product that will store, retrieve, manipulate, transmit or receive information electronically in a digital form, e.g. personal computers, digital television, email, robots. For clarity, Zuppo provided an ICT hierarchy where all levels of the hierarchy "contain some degree of commonality in that they are related to technologies that facilitate the transfer of information and various types of electronically mediated communications". Skills Framework for the Information Age is one of many models for describing and managing competencies for ICT professionals for the 21st century.

Etymology

The phrase "information and communication technologies" has been used by academic researchers since the 1980s, and the abbreviation ICT became popular after it was used in a report to the UK government by Dennis Stevenson in 1997, and in the revised National Curriculum for England, Wales and Northern Ireland in 2000. But in 2012, the Royal Society recommended that ICT should no longer be used in British schools "as it has attracted too many negative connotations", and with effect from 2014 the National Curriculum uses the word computing, which reflects the addition of computer programming into the curriculum.

Variations of the phrase have spread worldwide, with the United Nations creating a "United Nations Information and Communication Technologies Task Force" and an internal "Office of Information and Communications Technology".

Monetization

The money spent on IT worldwide has been most recently estimated as US $3.5 trillion and is currently growing at 5% per year, doubling every 15 years. The 2014 IT budget of US federal government is nearly $82 billion. IT costs, as a percentage of corporate revenue, have grown 50% since 2002, putting a strain on IT budgets. When looking at current companies' IT budgets, 75% are recurrent costs, used to "keep the lights on" in the IT department, and 25% are cost of new initiatives for technology development.

The average IT budget has the following breakdown:

• 31% personnel costs (internal)
• 29% software costs (external/purchasing category)
• 26% hardware costs (external/purchasing category)
• 14% costs of external service providers (external/services).

Technological capacity

The world's technological capacity to store information grew from 2.6 (optimally compressed) exabytes in 1986 to 15.8 in 1993, over 54.5 in 2000, and to 295 (optimally compressed) exabytes in 2007, and some 5 zettabytes in 2014. This is the informational equivalent to 1.25 stacks of CD-ROM from the earth to the moon in 2007, and the equivalent of 4,500 stacks of printed books from the earth to the sun in 2014. The world's technological capacity to receive information through one-way broadcast networks was 432 exabytes of (optimally compressed) information in 1986, 715 (optimally compressed) exabytes in 1993, 1.2 (optimally compressed) zettabytes in 2000, and 1.9 zettabytes in 2007. The world's effective capacity to exchange information through two-way telecommunication networks was 281 petabytes of (optimally compressed) information in 1986, 471 petabytes in 1993, 2.2 (optimally compressed) exabytes in 2000, 65 (optimally compressed) exabytes in 2007, and some 100 exabytes in 2014. The world's technological capacity to compute information with humanly guided general-purpose computers grew from 3.0 × 10^8 MIPS in 1986, to 6.4 x 10^12 MIPS in 2007.

ICT sector in the OECD

The following is a list of OECD countries by share of ICT sector in total value added in 2013.

Rank	Country	ICT sector in %	Relative size
1	Korea	10.7
2	Japan	7.02
3	Ireland	6.99
4	Sweden	6.82
5	Hungary	6.09
6	United States	5.89
7	Czech Republic	5.74
8	Finland	5.60
9	United Kingdom	5.53
10	Estonia	5.33
11	Slovakia	4.87
12	Germany	4.84
13	Luxembourg	4.54
14	Netherlands	4.44
15	Switzerland	4.63
16	France	4.33
17	Slovenia	4.26
18	Denmark	4.06
19	Spain	4.00
20	Canada	3.86
21	Italy	3.72
22	Belgium	3.72
23	Austria	3.56
24	Portugal	3.43
25	Poland	3.33
26	Norway	3.32
27	Greece	3.31
28	Iceland	2.87
29	Mexico	2.77

ICT Development Index

The ICT Development Index ranks and compares the level of ICT use and access across the various countries around the world.^[17] In 2014 ITU (International Telecommunications Union) released the latest rankings of the IDI, with Denmark attaining the top spot, followed by South Korea. The top 30 countries in the rankings include most high-income countries where quality of life is higher than average, which includes countries from Europe and other regions such as "Australia, Bahrain, Canada, Japan, Macao (China), New Zealand, Singapore and the United States; almost all countries surveyed improved their IDI ranking this year." In developing countries, ICT development is constrained by limited capabilities and often the objectives of ICT projects are not fully met.

The WSIS process and ICT development goals

On 21 December 2001, the United Nations General Assembly approved Resolution 56/183, endorsing the holding of the World Summit on the Information Society (WSIS) to discuss the opportunities and challenges facing today's information society.^[20] According to this resolution, the General Assembly related the Summit to the United Nations Millennium Declaration's goal of implementing ICT to achieve Millennium Development Goals. It also emphasized a multi-stakeholder approach to achieve these goals, using all stakeholders including civil society and the private sector, in addition to governments.

To help anchor and expand ICT to every habitable part of the world, "2015 is the deadline for achievements of the UN Millennium Development Goals (MDGs), which global leaders agreed upon in the year 2000."

In education

Today's society shows the ever-growing computer-centric lifestyle, which includes the rapid influx of computers in the modern classroom.

The United Nations Educational, Scientific and Cultural Organisation (UNESCO), a division of the United Nations, has made integrating ICT into education part of its efforts to ensure equity and access to education. The following, taken directly from a UNESCO publication on educational ICT, explains the organization's position on the initiative.

Information and Communication Technology can contribute to universal access to education, equity in education, the delivery of quality learning and teaching, teachers' professional development and more efficient education management, governance and administration. UNESCO takes a holistic and comprehensive approach to promoting ICT in education. Access, inclusion and quality are among the main challenges they can address. The Organization's Intersectral Platform for ICT in education focuses on these issues through the joint work of three of its sectors: Communication & Information, Education and Science.

Despite the power of computers to enhance and reform teaching and learning practices, improper implementation is a widespread issue beyond the reach of increased funding and technological advances with little evidence that teachers and tutors are properly integrating ICT into everyday learning. Intrinsic barriers such as a belief in more traditional teaching practices and individual attitudes towards computers in education as well as the teachers own comfort with computers and their ability to use them all as result in varying effectiveness in the integration of ICT in the classroom. 

Developing countries

Africa

Representatives meet for a policy forum on M-Learning at UNESCO's Mobile Learning Week in March 2017

ICT has been employed as an educational enhancement in Sub-Saharan Africa since the 1960's. Beginning with television and radio, it extended the reach of education from the classroom to the living room, and to geographical areas that had been beyond the reach of the traditional classroom. As technology evolved and became more widely used, efforts in Sub-Saharan Africa were also expanded. In the 1990's a massive effort to push computer hardware and software into schools was undertaken, with the goal of familiarizing both students and teachers with computers in the classroom. Since then, multiple projects have endeavored to continue the expansion of ICT's reach in the region, including the One Laptop Per Child (OLPC) project, which by 2015 had distributed over 2.4 million laptops to nearly 2 million students and teachers.

The inclusion of ICT in the classroom, often referred to as M-Learning, has expanded the reach of educators and improved their ability to track student progress in Sub-Saharan Africa. In particular, the mobile phone has been most important in this effort. Mobile phone use is widespread, and mobile networks cover a wider area than internet networks in the region. The devices are familiar to student, teach, and parent, and allow increased communication and access to educational materials. In addition to benefits for students, M-learning also offers the opportunity for better teacher training, which lends to a more consistent curriculum across the educational service area. In 2011, UNESCO started a yearly symposium called Mobile Learning Week with the purpose of gathering stakeholders to discuss the M-learning initiative.

Implementation is not without its challenges. While mobile phone and internet use are increasing much more rapidly in Sub-Saharan Africa than in other developing countries, the progress is still slow compared to the rest of the developed world, with smartphone penetration only expected to reach 20% by 2017. Additionally, there are gender, social, and geo-political barriers to educational access, and the severity of these barriers vary greatly by country. Overall, 29.6 million children in Sub-Saharan Africa were not in school in the year 2012, owing not just to the geographical divide, but also to political instability, the importance of social origins, social structure, and gender inequality. Once in school, students also face barriers to quality education, such as teacher competency, training and preparedness, access to educational materials, and lack of information management.

Today

In modern society ICT is ever-present, with over three billion people having access to the Internet. With approximately 8 out of 10 Internet users owning a smartphone, information and data are increasing by leaps and bounds. This rapid growth, especially in developing countries, has led ICT to become a keystone of everyday life, in which life without some facet of technology renders most of clerical, work and routine tasks dysfunctional. The most recent authoritative data, released in 2014, shows "that Internet use continues to grow steadily, at 6.6% globally in 2014 (3.3% in developed countries, 8.7% in the developing world); the number of Internet users in developing countries has doubled in five years (2009-2014), with two thirds of all people online now living in the developing world."

However, hurdles are still large. "Of the 4.3 billion people not yet using the Internet, 90% live in developing countries. In the world's 42 Least Connected Countries (LCCs), which are home to 2.5 billion people, access to ICTs remains largely out of reach, particularly for these countries' large rural populations." ICT has yet to penetrate the remote areas of some countries, with many developing countries dearth of any type of Internet. This also includes the availability of telephone lines, particularly the availability of cellular coverage, and other forms of electronic transmission of data. The latest "Measuring the Information Society Report" cautiously stated that the increase in the aforementioned cellular data coverage is ostensible, as "many users have multiple subscriptions, with global growth figures sometimes translating into little real improvement in the level of connectivity of those at the very bottom of the pyramid; an estimated 450 million people worldwide live in places which are still out of reach of mobile cellular service."

Favorably, the gap between the access to the Internet and mobile coverage has decreased substantially in the last fifteen years, in which "2015 [was] the deadline for achievements of the UN Millennium Development Goals (MDGs), which global leaders agreed upon in the year 2000, and the new data show ICT progress and highlight remaining gaps." ICT continues to take on new form, with nanotechnology set to usher in a new wave of ICT electronics and gadgets. ICT newest editions into the modern electronic world include smart watches, such as the Apple Watch, smart wristbands such as the Nike+ FuelBand, and smart TVs such as Google TV. With desktops soon becoming part of a bygone era, and laptops becoming the preferred method of computing, ICT continues to insinuate and alter itself in the ever-changing globe.

Information communication technologies play a role in facilitating accelerated pluralism in new social movements today. The internet according to Bruce Bimber is "accelerating the process of issue group formation and action" and coined the term accelerated pluralism to explain this new phenomena. ICTs are tools for "enabling social movement leaders and empowering dictators" in effect promoting societal change. ICTs can be used to garner grassroots support for a cause due to the internet allowing for political discourse and direct interventions with state policy as well as change the way complaints from the populace are handled by governments. Furthermore, ICTs in a household are associated with women rejecting justifications for intimate partner violence. According to a study published in 2017, this is likely because “[a]ccess to ICTs exposes women to different ways of life and different notions about women’s role in society and the household, especially in culturally conservative regions where traditional gender expectations contrast observed alternatives."

Currency

From Wikipedia, the free encyclopedia

A currency (from Middle English: curraunt, "in circulation", from Latin: currens, -entis), in the most specific use of the word, refers to money in any form when in actual use or circulation as a medium of exchange, especially circulating banknotes and coins. A more general definition is that a currency is a system of money (monetary units) in common use, especially in a nation. Under this definition, US dollars, British pounds, Australian dollars, European euros and Russian ruble are examples of currency. These various currencies are recognized stores of value and are traded between nations in foreign exchange markets, which determine the relative values of the different currencies. Currencies in this sense are defined by governments, and each type has limited boundaries of acceptance.

Other definitions of the term "currency" are discussed in their respective synonymous articles banknote, coin, and money. The latter definition, pertaining to the currency systems of nations, is the topic of this article. Currencies can be classified into two monetary systems: fiat money and commodity money, depending on what guarantees the value (the economy at large vs. the government's physical metal reserves). Some currencies are legal tender in certain political jurisdictions. Others are simply traded for their economic value. Digital currency has arisen with the popularity of computers and the Internet.

History

Early currency

Cowry shells being used as money by an Arab trader.

Originally money was a form of receipt, representing grain stored in temple granaries in Sumer in ancient Mesopotamia and later in Ancient Egypt.

In this first stage of currency, metals were used as symbols to represent value stored in the form of commodities. This formed the basis of trade in the Fertile Crescent for over 1500 years. However, the collapse of the Near Eastern trading system pointed to a flaw: in an era where there was no place that was safe to store value, the value of a circulating medium could only be as sound as the forces that defended that store. Trade could only reach as far as the credibility of that military. By the late Bronze Age, however, a series of treaties had established safe passage for merchants around the Eastern Mediterranean, spreading from Minoan Crete and Mycenae in the northwest to Elam and Bahrain in the southeast. It is not known what was used as a currency for these exchanges, but it is thought that ox-hide shaped ingots of copper, produced in Cyprus, may have functioned as a currency.

It is thought that the increase in piracy and raiding associated with the Bronze Age collapse, possibly produced by the Peoples of the Sea, brought the trading system of oxhide ingots to an end. It was only with the recovery of Phoenician trade in the 10th and 9th centuries BC that saw a return to prosperity, and the appearance of real coinage, possibly first in Anatolia with Croesus of Lydia and subsequently with the Greeks and Persians. In Africa, many forms of value store have been used, including beads, ingots, ivory, various forms of weapons, livestock, the manilla currency, and ochre and other earth oxides. The manilla rings of West Africa were one of the currencies used from the 15th century onwards to sell slaves. African currency is still notable for its variety, and in many places various forms of barter still apply.

Coinage

These factors led to the metal itself being the store of value: first silver, then both silver and gold, and at one point also bronze. Now we have copper coins and other non-precious metals as coins. Metals were mined, weighed, and stamped into coins. This was to assure the individual taking the coin that he was getting a certain known weight of precious metal. Coins could be counterfeited, but they also created a new unit of account, which helped lead to banking. Archimedes' principle provided the next link: coins could now be easily tested for their fine weight of metal, and thus the value of a coin could be determined, even if it had been shaved, debased or otherwise tampered with (see Numismatics).

Most major economies using coinage had several tiers of coins, using a mix of copper, silver and gold. Gold coins were used for large purchases, payment of the military and backing of state activities; they were more often used as measures of account than physical coins. Silver coins were used for midsized transactions, and as a unit of account for taxes, dues, contracts and fealty, while coins of copper, silver, or some mixture thereof (see debasement), were used for everyday transactions. This system had been used in ancient India since the time of the Mahajanapadas. The exact ratio in value of the three metals varied greatly in different eras and places; for example, the opening of silver mines in the Harz mountains of central Europe made silver relatively less valuable, as did the flood of New World silver after the Spanish conquests. However, the rarity of gold consistently made it more valuable than silver, and likewise silver was consistently worth more than copper.

Paper money

In premodern China, the need for credit and for a medium of exchange that was less physically cumbersome than large numbers of copper coins led to the introduction of paper money, i.e. banknotes. Their introduction was a gradual process which lasted from the late Tang dynasty (618–907) into the Song dynasty (960–1279). It began as a means for merchants to exchange heavy coinage for receipts of deposit issued as promissory notes by wholesalers' shops. These notes were valid for temporary use in a small regional territory. In the 10th century, the Song dynasty government began to circulate these notes amongst the traders in its monopolized salt industry. The Song government granted several shops the right to issue banknotes, and in the early 12th century the government finally took over these shops to produce state-issued currency. Yet the banknotes issued were still only locally and temporarily valid: it was not until the mid 13th century that a standard and uniform government issue of paper money became an acceptable nationwide currency. The already widespread methods of woodblock printing and then Pi Sheng's movable type printing by the 11th century were the impetus for the mass production of paper money in premodern China.

Song dynasty Jiaozi, the world's earliest paper money.

At around the same time in the medieval Islamic world, a vigorous monetary economy was created during the 7th–12th centuries on the basis of the expanding levels of circulation of a stable high-value currency (the dinar). Innovations introduced by Muslim economists, traders and merchants include the earliest uses of credit, cheques, promissory notes, savings accounts, transactional accounts, loaning, trusts, exchange rates, the transfer of credit and debt, and banking institutions for loans and deposits.

In Europe, paper money was first introduced on a regular basis in Sweden in 1661 (although Washington Irving records an earlier emergency use of it, by the Spanish in a siege during the Conquest of Granada). As Sweden was rich in copper, its low value necessitated extraordinarily big coins, often weighing several kilograms.

The advantages of paper currency were numerous: it reduced the need to transport gold and silver, which was risky; it facilitated loans of gold or silver at interest, since the underlying specie (gold or silver) never left the possession of the lender until someone else redeemed the note; and it allowed a division of currency into credit and specie backed forms. It enabled the sale of stock in joint-stock companies, and the redemption of those shares in paper.

But there were also disadvantages. First, since a note has no intrinsic value, there was nothing to stop issuing authorities from printing more notes than they had specie to back them with. Second, because it increased the money supply, it increased inflationary pressures, a fact observed by David Hume in the 18th century. Thus paper money would often lead to an inflationary bubble, which could collapse if people began demanding hard money, causing the demand for paper notes to fall to zero. The printing of paper money was also associated with wars, and financing of wars, and therefore regarded as part of maintaining a standing army. For these reasons, paper currency was held in suspicion and hostility in Europe and America. It was also addictive, since the speculative profits of trade and capital creation were quite large. Major nations established mints to print money and mint coins, and branches of their treasury to collect taxes and hold gold and silver stock.

At that time, both silver and gold were considered legal tender, and accepted by governments for taxes. However, the instability in the ratio between the two grew over the course of the 19th century, with the increases both in supply of these metals, particularly silver, and in trade. The parallel use of both metals is called bimetallism, and the attempt to create a bimetallic standard where both gold and silver backed currency remained in circulation occupied the efforts of inflationists. Governments at this point could use currency as an instrument of policy, printing paper currency such as the United States Greenback, to pay for military expenditures. They could also set the terms at which they would redeem notes for specie, by limiting the amount of purchase, or the minimum amount that could be redeemed.

By 1900, most of the industrializing nations were on some form of gold standard, with paper notes and silver coins constituting the circulating medium. Private banks and governments across the world followed Gresham's law: keeping the gold and silver they received, but paying out in notes. This did not happen all around the world at the same time, but occurred sporadically, generally in times of war or financial crisis, beginning in the early part of the 20th century and continuing across the world until the late 20th century, when the regime of floating fiat currencies came into force. One of the last countries to break away from the gold standard was the United States in 1971, an action known as the Nixon shock. No country has an enforceable gold standard or silver standard currency system.

Banknote era

A banknote (more commonly known as a bill in the United States and Canada) is a type of currency, and commonly used as legal tender in many jurisdictions. With coins, banknotes make up the cash form of all money. Banknotes are mostly paper, but Australia's Commonwealth Scientific and Industrial Research Organisation developed the world's first polymer currency in the 1980s that went into circulation on the nation's bicentenary in 1988. Now used in some 22 countries (over 40 if counting commemorative issues), polymer currency dramatically improves the life span of banknotes and prevents counterfeiting.

Modern currencies

Name of currency units by country.

Strength of currencies relative to USD as of April 2016.

Currencies exchange logo

Most traded currencies by value
Currency distribution of global foreign exchange market turnover

Rank	Currency	ISO 4217 code (symbol)	% daily share (April 2016)
1	United States dollar	USD (US$)	87.6%
2	Euro	EUR (€)	31.4%
3	Japanese yen	JPY (¥)	21.6%
4	Pound sterling	GBP (£)	12.8%
5	Australian dollar	AUD (A$)	6.9%
6	Canadian dollar	CAD (C$)	5.1%
7	Swiss franc	CHF (Fr)	4.8%
8	Renminbi	CNY (元)	4.0%
9	Swedish krona	SEK (kr)	2.2%
10	New Zealand dollar	NZD (NZ$)	2.1%
11	Mexican peso	MXN ($)	1.9%
12	Singapore dollar	SGD (S$)	1.8%
13	Hong Kong dollar	HKD (HK$)	1.7%
14	Norwegian krone	NOK (kr)	1.7%
15	South Korean won	KRW (₩)	1.7%
16	Turkish lira	TRY (₺)	1.4%
17	Russian ruble	RUB (₽)	1.1%
18	Indian rupee	INR (₹)	1.1%
19	Brazilian real	BRL (R$)	1.0%
20	South African rand	ZAR (R)	1.0%
Other			7.1%
Total			200.0%

Currency use is based on the concept of lex monetae; that a sovereign state decides which currency it shall use. Currently, the International Organization for Standardization has introduced a three-letter system of codes (ISO 4217) to define currency (as opposed to simple names or currency signs), in order to remove the confusion that there are dozens of currencies called the dollar and many called the franc. Even the pound is used in nearly a dozen different countries; most of these are tied to the Pound Sterling, while the remainder have varying values. In general, the three-letter code uses the ISO 3166-1 country code for the first two letters and the first letter of the name of the currency (D for dollar, for instance) as the third letter. United States currency, for instance is globally referred to as USD.
The International Monetary Fund uses a variant system when referring to national currencies.

Alternative currencies

Distinct from centrally controlled government-issued currencies, private decentralized trust networks support alternative currencies such as Bitcoin, Litecoin, Monero, Peercoin or Dogecoin, as well as branded currencies, for example 'obligation' based stores of value, such as quasi-regulated BarterCard, Loyalty Points (Credit Cards, Airlines) or Game-Credits (MMO games) that are based on reputation of commercial products, or highly regulated 'asset backed' 'alternative currencies' such as mobile-money schemes like MPESA (called E-Money Issuance).

Currency may be Internet-based and digital, for instance, Bitcoin is not tied to any specific country, or the IMF's SDR that is based on a basket of currencies (and assets held).

Control and production

In most cases, a central bank has a monopoly right to issue of coins and banknotes (fiat money) for its own area of circulation (a country or group of countries); it regulates the production of currency by banks (credit) through monetary policy.

An exchange rate is the price at which two currencies can be exchanged against each other. This is used for trade between the two currency zones. Exchange rates can be classified as either floating or fixed. In the former, day-to-day movements in exchange rates are determined by the market; in the latter, governments intervene in the market to buy or sell their currency to balance supply and demand at a fixed exchange rate.

In cases where a country has control of its own currency, that control is exercised either by a central bank or by a Ministry of Finance. The institution that has control of monetary policy is referred to as the monetary authority. Monetary authorities have varying degrees of autonomy from the governments that create them. A monetary authority is created and supported by its sponsoring government, so independence can be reduced by the legislative or executive authority that creates it.

Several countries can use the same name for their own separate currencies (for example, dollar in Australia, Canada and the United States). By contrast, several countries can also use the same currency (for example, the euro or the CFA franc), or one country can declare the currency of another country to be legal tender. For example, Panama and El Salvador have declared US currency to be legal tender, and from 1791 to 1857, Spanish silver coins were legal tender in the United States. At various times countries have either re-stamped foreign coins, or used currency board issuing one note of currency for each note of a foreign government held, as Ecuador currently does.

Each currency typically has a main currency unit (the dollar, for example, or the euro) and a fractional unit, often defined as ​¹⁄₁₀₀ of the main unit: 100 cents = 1 dollar, 100 centimes = 1 franc, 100 pence = 1 pound, although units of ​¹⁄₁₀ or ​¹⁄₁₀₀₀ occasionally also occur. Some currencies do not have any smaller units at all, such as the Icelandic króna.

Mauritania and Madagascar are the only remaining countries that do not use the decimal system; instead, the Mauritanian ouguiya is in theory divided into 5 khoums, while the Malagasy ariary is theoretically divided into 5 iraimbilanja. In these countries, words like dollar or pound "were simply names for given weights of gold."^[12] Due to inflation khoums and iraimbilanja have in practice fallen into disuse. (See non-decimal currencies for other historic currencies with non-decimal divisions.)

Currency convertibility

Convertibility of a currency determines the ability of an individual, corporate or government to convert its local currency to another currency or vice versa with or without central bank/government intervention. Based on the above restrictions or free and readily conversion features, currencies are classified as:

Fully convertible 

When there are no restrictions or limitations on the amount of currency that can be traded on the international market, and the government does not artificially impose a fixed value or minimum value on the currency in international trade. The US dollar is an example of a fully convertible currency and, for this reason, US dollars are one of the major currencies traded in the foreign exchange market.

Partially convertible 

Central banks control international investments flowing in and out of the country, while most domestic trade transactions are handled without any special requirements, there are significant restrictions on international investing and special approval is often required in order to convert into other currencies. The Indian rupee and Renminbi are examples of a partially convertible currency.

Nonconvertible 

Neither participate in the international FOREX market nor allow conversion of these currencies by individuals or companies. As a result, these currencies are known as blocked currencies. e.g.: North Korean won and the Cuban peso.

Local currencies

In economics, a local currency is a currency not backed by a national government, and intended to trade only in a small area. Advocates such as Jane Jacobs argue that this enables an economically depressed region to pull itself up, by giving the people living there a medium of exchange that they can use to exchange services and locally produced goods (in a broader sense, this is the original purpose of all money). Opponents of this concept argue that local currency creates a barrier which can interfere with economies of scale and comparative advantage, and that in some cases they can serve as a means of tax evasion.

Local currencies can also come into being when there is economic turmoil involving the national currency. An example of this is the Argentinian economic crisis of 2002 in which IOUs issued by local governments quickly took on some of the characteristics of local currencies.

One of the best examples of a local currency is the original LETS currency, founded on Vancouver Island in the early 1980s. In 1982, the Canadian Central Bank’s lending rates ran up to 14% which drove chartered bank lending rates as high as 19%. The resulting currency and credit scarcity left island residents with few options other than to create a local currency.