British Pound Currency

Synopsis

British pound is an important currency and is also the oldest currency in use. It is highly valued among all other currencies in the world and is on the third place following Japanese yen of being heavily traded currencies in the globe. The foreign exchange trading hub contributes to be the biggest reasons for heavy trading with this currency as it uses a regime of floating rate. The pound sterling laws create confusions owing to their complicated formulas.

The currency issued by Bank of England is accepted in Wales and England and not in Northern Ireland and Scotland. The British economy contraction has resulted in a monetary system that is highly volatile and the currency fluctuates frequently attracting the investor’s attention.

History

British pound, the word pound is derived from ‘troy pound’, while sterling from ‘sterling silver’ term. Sterling was introduced in 1158 by King Henry II, however earlier to sterling, coins known as sceats were regarded to be the currency and was the main basis of exchange. The currency code of British pound is GBP and the numeric code 826.

This is the legal currency for countries such as Scotland, England, Northern Ireland and Wales.

The pound sterling is also the oldest currency in use ranking to be the top most currencies in line with Euro, United States dollar and Japanese yen. This currency of UK has the highest value in comparison to all other major currency units.

Scottish pounds are considered as a separate currency, but Scottish and British pounds are interchangeable and are widely accepted in Great Britain as they possess equal value.

Structure

One pound is equal to 100 pence. The coinage is available for 9 denominations such that 1 penny, 2, 5, 10, 20, 50 pence as well as 1, 2 and 5 pounds.

The minting of the British pound is done by Royal mint and the denominations of these coins are only for a limited amount such that 1 penny & 2 pence coin are used up to 20 pence, 5 & 10 pence up to 5 pounds and 20 & 50 pence up to 10 pounds.

Currently, the bank notes for this currency are in 4 denominations 5, 10, 20 and 50 pounds. The central bank is the Bank of England, but different banks perform printing function for different notes.

The notes have historical characters namely Charles Darwin, Elizabeth Fry, Sir John Houblon and Sir Edward Elgar on the reverse side and the queen on the front side. Bank of England prints the English notes, while the Scottish notes are printed by Bank of Scotland, Clydesdale bank and Royal bank of Scotland and the notes in Northern Ireland, Isle of Man and States of Jersey are printed by Northern bank, Ulster bank, First trust bank and Bank of Ireland.