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The British Pound, also known as Pound Sterling and abbreviated as GBP (Great Britain Pound), is the official currency of the United Kingdom and Great Britain. It is the fourth most traded currency in the foreign exchange market. Together with the US Dollars, Japanese Yen and the Euro, these currencies form the basis at which the value of the IMF special drawing rights are made up of. It is also among the top three of the most held reserve currency in the global market.
The official name of the British currency is Pound Sterling. However, this name is used only for formal contexts. For casual contexts, the term pound is used to refer to this currency. There are many other terms used to refer to the British Pound, particularly in the forex market. Some of the forex experts would refer to it as ‘sterling’ or ‘cable’.
The use of paper money and the issuance of bank notes started in 1694, which coincides with the founding of the Bank of England. A year later, the Bank of Scotland was founded. Both of these banks began to issue paper money to be circulated in the UK and Scotland. Below is a list of countries and territories that are currently using the British Pound currency:
- United Kingdom
- Isle of Man
- South Georgia and the South Sandwich Islands
- British Antarctic Territory
- Falkland Islands
- Saint Helena
Fun Facts About British Pound
Below are a few interesting facts that you need to know about the British Pound:
- The British Pound is the oldest currency in the world that is still in use today. The earliest record of the use of the British Pound can be traced back to the time of the Anglo-Saxons.
- There are several banks in the UK that are permitted to issue bank notes for the GBP. For England and Wales, the Bank of England is designated for printing and issuing bank notes. For Scotland, three banks can issue notes: Bank of Scotland, Clydesdale Bank, and Royal Bank of Scotland.
- The name of the currency was derived from a Latin word, “libra”. This word means weight and balance.
- The Pound has managed to survive as an independent currency even though most of Europe has adapted the Euro currency.
- Since 1960, Queen Elizabeth II was featured on every bank note from Bank of England.
- The GBP is the fourth most traded currency in the world. Only the US Dollar, Euro and Japanese Yen are higher in that list.
- During World War II, the Nazi Germany produced several quantities of counterfeit British bank notes. This was an attempt to de-valuate the currency and cause destabilization to the British economy. When the war ended, about 12% of the sterling notes in circulation were counterfeit. This prompted the British government to take the notes with higher denomination out of circulation and by adding metal threads to the notes that were produced.