Fiat Currencies
This section provides an overview of traditional currencies that are recognized as legal tender, regulated by government laws.
Fiat currencies play a crucial role in the global economy, acting as the primary medium for transactions, a store of value, and a standard of account. Unlike digital currencies, fiat currencies are tangible, taking the form of coins and paper money. Their value is derived from the trust and authority of the issuing governments rather than any physical commodity or decentralized technology.
In our analysis, we primarily utilize data from the Bank for International Settlements (BIS) and other networks. The world of fiat currencies can be categorized into formal sectors, known as Reporting Dealers, and informal or non-reporting sectors, as classified by the BIS. We extensively use data from the BIS Triennial Survey, which aims to provide comprehensive and consistent information on the size and structure of global foreign exchange and over-the-counter (OTC) derivatives markets. The survey enhances the transparency of OTC markets and aids central banks and other authorities in monitoring global financial market developments. It also supports discussions on OTC market reforms.
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Below is a summary of the turnover of OTC foreign exchange instruments for the year 2022, as reported by the Bank for International Settlements (BIS). This data is essential for understanding the dynamics of the global foreign exchange markets.
Key Reference
- Source: Bank for International Settlements (BIS)
- Last Update of Data: 05/12/2022
Data Summary
| Category | Total (in millions USD) | Spot Transactions | Outright Forwards | Foreign Exchange Swaps | Currency Swaps | FX Options |
|---|---|---|---|---|---|---|
| Total, "net-net" basis | 7,505,992 | 2,104,019 | 1,163,471 | 3,810,157 | 123,945 | 304,330 |
| By Currency | ||||||
| US Dollar | 6,638,790 | 1,806,765 | 993,631 | 3,457,230 | 115,920 | 265,244 |
| Euro | 2,292,444 | 616,115 | 285,874 | 1,262,862 | 36,176 | 91,417 |
| Yen | 1,253,236 | 438,969 | 182,902 | 557,255 | 14,395 | 59,715 |
| Pound Sterling | 968,139 | 231,023 | 136,089 | 560,164 | 17,759 | 23,104 |
| Renminbi | 526,231 | 175,032 | 65,169 | 230,612 | 2,703 | 52,715 |
| Australian Dollar | 478,577 | 155,880 | 65,786 | 213,547 | 23,418 | 19,945 |
| Canadian Dollar | 465,776 | 128,230 | 61,804 | 252,317 | 6,865 | 16,559 |
| Swiss Franc | 389,700 | 88,328 | 45,256 | 244,552 | 2,248 | 9,316 |
| Other Currencies | 1,999,093 | 567,695 | 490,433 | 841,774 | 28,405 | 70,645 |
This table provides a comprehensive view of the OTC foreign exchange market's structure and volume, highlighting the dominance of major currencies and the significant role of derivatives in modern finance.