- Politics and Social Issues
World's Worthless Fiat Currency List
Fiat money represents a receipt that only has value because of government decree via regulation and/or law. Fiat is a Latin term, meaning "let it be done." Today, all national currencies use fiat. A currency is the recognized tender and money circulation as dictated by the federal government of a given nation. Today, all national currencies are fiat currencies, due to the elimination of the gold standard and barter system. This trend began with the Nixon Shock of 1971, which ended the backing by precious metal of the U.S. dollar.
While the U.S is struggling with massive hyperinflation, it's important to note that presently and historically speaking, there are cases of countries having their fiat currencies so incredibly devalued that they could no longer issue out coins. Many such nations have paper bills pegged at over several thousands. Here is a list of the top 10 nations with the most worthless fiat currencies:
1. Somalia: Currency used is the Somali Shilling. As of January 1st, 2011, 1 US Dollar was the equivalent of 33,300 Somali Shillings. Hyperinflation is so horrible in Somalia that they no longer issues out any coins. It's illegal to barter and or trade coinage. The highest valued banknote in Somalia is 1,000 (approximately valued at 3 cents U.S).
2. Vietnam: Currency is the Dồng (VND). As of January 1st 2011, 1 US Dollar is valued at approximately 19,487 Dồngs. The highest valued coin in circulation is pegged at 5,000 (estimated 26 cents US). The highest valued banknote is 500,000 ($25.66 US).
3. São Tomé and Príncipe: The fiat currency is the Dobra. As of January 1st, 2011, 1 US Dollar was the equivalent of 18,260 Dobras. The highest valued coin was issued at 2,000 (approximately 11 cents US). The highest valued banknote is pegged at 100,000 ($5.48 US).
4. Iran: The fiat currency in use by Iran is the Rial. As of January 1st, 2011, 1 US Dollar was the equivalent of 10,349.59 Rials. The highest issued coin is pegged at 5,000 (48 cents US). Of note is that Iran still has many silver coins left in circulation. These coins contain approximately 40-60% silver and may be the most undervalued coins in the history of mankind. The highest valued legal tendered banknote is pegged at 100,000 ($9.66 US). However 500,000 Rial, 1,000,000 Rial and 2,000,000 Rial Iran Cheques circulate freely and are treated as cash. The central bank used to allow major state banks to print their own banknotes known as "cash cheques". They were a form of bearer teller's-cheque with fixed amounts, printed in the form of official banknotes. Once they were acquired from banks, they could function like cash for a year. Two forms of these banknotes were available. One known as "Iran cheque" could be cashed in any financial institution, while the other could be cashed at the issuing bank. They were printed in 200,000, 500,000, 1,000,000, and 2,000,000 Rial values.
5. Indonesia: The fiat currency is the Rupiah (IDR). As of January 1st, 2011, 1 US Dollar was the equivalent of 9,009.01 Rupiahs. The highest valued coin is pegged at 1,000 Rupiahs (approximately 11 cents US), however there are only a few hundred in circulation. The highest common issued coin is pegged at 500 (approximately 5 cents US). The highest valued banknote in Indonesia is listed at 100,000 (approximately $11.10 US).
6. Loas: The fiat currency in use for Loas is the Kip (LAK). As of January 1st, 2011, 1 US Dollar was the equivalent of 8,051.30 Kips. Loas currently has no coins in active circulation. In 1952, coins were issued in denominations of 10, 20 and 50 att or cents with French and Lao inscriptions. All were struck in aluminum and had a hole in the centre. However, this was the only year of issue. The majority of the coins has since returned back to government coffers and is no longer recognized as legalized tender. The highest valued banknote in Loas is pegged at 50,000 (approximately $11 US).
7. Guinea: The fiat currency used in Guinea is still the Franc (GNF). As of January 1st, 2011, 1 US Dolar was the equivalent of 6,925.00 Guinean Francs. The first Guinean Franc was introduced in 1959 to replace the CFA franc. There were 1, 5, 10 and 25 Francs coins (made of aluminum bronze) with banknotes (dated 1958) in 50, 100, 500, 1000, 5000 and 10,000 Francs denominations. In 1971, the Franc was replaced by Syli at a rate of 1 Syli = 10 francs. The Guinean Franc was reintroduced as Guinea's currency in 1985, at par with the Syli. The coins came in denominations of 1, 5 and 10 Francs, with 25 Francs (1987) and 50 Francs (1994) added later. Banknotes were issued in denominations of 25, 50, 100, 500, 1000 and 5000 Francs. The 10,000 Franc was dropped. On June 11th, 2007, a 10,000 Franc was reintroduced, valued at approximately $1.44 US.
8. Zambia: The fiat currency in Zambia is the Kwacha (ZMK). As of January 1st, 2011, 1 US Dollar was the equivalent of 4,797.51 Kwachas. The currency was introduced in 1968, replacing the Pound. It has since suffered from extreme hyperinflation. In 1968, the Kwacha was hovering on par around the US Dollar, valued at 1.2 U.S. dollars. While Zambia has coins dating back in the 60's all the way through to the 90's that remain legalized tender, their diminished value has turned them into a relic. The coins are never seen or used in normal trade. The only place you see coins today is when they are sold as souvenirs to tourists. The highest valued banknote is pegged at 50,000 (approximately $10.42 US).
9. Paraguay: The fiat currency in use for Paraguay is the Guaraní (PYG). As of January 1st, 2011, 1 US Dollar was the equivalent of 4,642.55 Guaranis. The highest valued coin is pegged at 1,000 (approximately 22 cents US). The highest valued banknote is stated at 100,000 (around $21.54 US).
10. Sierra Leone: The fiat currency in use for Sierra Leone is the Leone (SLL). As of January 1st, 2011, 1 US Dollar was the equivalent of 4,120.00 Leones. The highest valued coin is a mere 500 (approximately 12 cents US), however that issue is uncommon. There is a common issued coin pegged at 100 (approximately 2 cents US) in circulation. The highest valued banknote is 10,000 (valued at $2.43 US).
Historical Fiat Currency Disasters
Zimbabwe (September 22nd 2008 to February 2nd, 2009): The Zimbabwean Dollar (ZWR) was the official currency of Zimbabwe from 1980 to 12 April 2009. The Zimbabwean Dollar was originally a promising prospect. Zimbabwe was showing signs of a wealthy economy fuelled by the sugar cane trade and a government moving towards deregulation. When first introduced the currency was considered to be among the highest valued currency units in the world. Political turmoil, mostly caused by irrational stimulation and government kick backs within the market, caused rapid hyperinflation that eroded the value of the Zimbabwe dollar to eventually become the least valued currency in the world. The currency then underwent three separate redenominations. Banknote denominations were issued for as high as $100 trillion. The use of the Zimbabwean Dollar as an official currency was effectively abandoned on 12 April 2009. This was a result of the Reserve Bank of Zimbabwe legalizing the use of foreign currencies for transactions in January 2009.
The third redenomination period for Zimbabwe was a complete disaster. The currency, already the least valuable on the planet, went from approximately 1 (US) = 12,336,416,667(ZWR) to 1 (US) = 300,000,000,000,000 (ZWR) from September 22nd 2008 to February 2nd 2009.
Germany (September 1922 to December 31st 1923): One of the most spectacular moments of hyperinflation came from Germany shortly after WWI and the German Revolution. This was during the oppressive Treaty of Versailles and the installment of the Weimar Republic. In its 14 years of existence, the Weimar Republic faced numerous problems, including hyperinflation, political extremists on the left and the right and their paramilitaries, and hostility from the victors of World War I. The Mark, the German currency at the time, went from a staggering 1 (US) = 12,500 Marks as of September 1922 to 1 (US) = 4,000,000,000,000 Marks as of December 31st 1923.
-Donovan D. Westhaver
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