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The definition of currency is a system of money in general use in a particular country.

Does system in this context means definition #11 from Google definition?

sys·tem noun /ˈsistəm/  systems, plural

  1. A set of connected things or parts forming a complex whole, in particular

  2. A set of things working together as parts of a mechanism or an interconnecting network -the state railroad system -fluid is pushed through a system of pipes or channels

  3. A set of organs in the body with a common structure or function -the digestive system
  4. The human or animal body as a whole - you need to get the cholesterol out of your system
  5. A group of related hardware units or programs or both, esp. when dedicated to a single application
  6. (in chronostratigraphy) A major range of strata that corresponds to a period in time, subdivided into series
  7. A group of celestial objects connected by their mutual attractive forces, esp. moving in orbits about a center -the system of bright stars known as the Gould Belt
  8. A set of principles or procedures according to which something is done; an organized scheme or method -a multiparty system of government -the public school system
  9. Orderliness; method -there was no system at all in the company
  10. A method of choosing one's procedure in gambling
  11. A set of rules used in measurement or classification -the metric system
  12. The prevailing political or social order, esp. when regarded as oppressive and intransigent -don't try bucking the system
  13. A set of staves in a musical score joined by a brace
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I prefer #10, "a method of choosing one's procedure in gambling." –  rajah9 Mar 5 '13 at 17:07

1 Answer 1

I agree with your use of definitions 1, 2, 8, and 11. Let me address them in reverse order.

Before they became fiat money, currency used to have some reference to a weight in precious metal (e.g., Pounds Sterling). So here, sense 11 ("rules used in measurement") comes into play.

Since I mentioned fiat money, one must also consider the "organized scheme" of sense 8. I'm thinking of

  • a banking system,
  • a national bank (the Federal Reserve in the US),
  • laws to regulate banks,
  • printing of currency, ("Inflation is always and everywhere a monetary phenomenon." --M. Friedman and A. Schwartz)
  • buying out bad assets, (Quantitative Easing)
  • determining accounting standards (FASB in the US).

In a fractional reserve system, banks are permitted to lend out a portion of their deposits. In the US, the Federal Reserve determines what the proportion will be. Banks can also borrow money overnight; this is rate is also set by the Fed in the U.S.

The currency system is also "an interconnected network" (sense 2). Think about what it means to buy a cup at Tim Horton's with your debit card. (The mind staggers to think of those Loonies nicked from your account, bouncing around Canada, and ending up on Tim Horton's balance sheet for a bit before being converted to another currency (CFA) to pay the Robusta producers in Cote d'Ivoire.)

There is an emergent phenomenon of "parts forming a complex whole" (sense 1). The Loonie (or now missing pennies) in your pocket are pieces of paper or metal in and of themselves. But in combination with the other Canadian dollars they facilitate commerce, finance, banking, marketplaces, services; savers and spenders, taxpayers and legislators, debits and credits.

One can also imagine a currency system under pressure (e.g., "Get 30% on your Greek bond!") This is where I'd bring in sense 10.

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