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The United States dollar (sign: $; code: USD; also abbreviated US$), also referred to as the American dollar, is the official currency of the United States of America and its overseas territories. It is divided into 100 smaller units called cents.

The U.S. dollar is the currency most used in international transactions and is one of the world's dominant reserve currencies. Several countries use it as their official currency and, in many others, it is the de facto currency. It is also used as the sole currency in some British Overseas Territories (British Virgin Islands and Turks and Caicos).

Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past, a standard of deferred payment. Any kind of object or secure verifiable record that fulfills these functions can serve as money.

Money originated as commodity money, but nearly all contemporary money systems are based on fiat money. Fiat money is without intrinsic use value as a physical commodity, and derives its value by being declared by a government to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for "all debts, public and private".

The money supply of a country consists of currency (banknotes and coins) and bank money (the balance held in checking accounts and savings accounts). Bank money usually forms by far the largest part of the money supply.

A banknote (often known as a bill, paper money or simply a note) is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money. Traditional banknotes have largely been replaced with national banknotes issued by governments or central banks. National banknotes usually have legal tender status and are accepted at face value without discounting. National banknotes of Western countries have a history of backing in gold or silver and sometimes both; however, most of today's national banknotes have no backing in precious metals or commodities and have value only by fiat. With the exception of non-circulating high-value or precious metal issues, coins are used for lower valued monetary units, while banknotes are used for higher values.

The banknote was first developed in China during the Tang and Song dynasties, starting in the 7th century. Its roots were in merchant receipts of deposit during the Tang Dynasty (618–907), as merchants and wholesalers desired to avoid the heavy bulk of copper coinage in large commercial transactions. During the Yuan Dynasty, banknotes were adopted by the Mongol Empire. In Europe, the concept of banknotes was first introduced during the 13th century, with proper banknotes appearing in the 17th century.