In most cases across the world in various countries, each private central bank single-handedly controls or has monopoly control over the production and supply of its own currency. To facilitate trade between various currency zones, exchange rates come into being. Exchange rates are the prices at which currencies as well as the goods and services of individual currency zones/countries can be exchanged against each other.

Currency can be classified as either floating and fixed based on the exchange rate rules and principals.

In case of countries where they do not have control of its own currency, that control lies with either the Central bank or by Ministry of Finance of that country. In any of the cases, the institution, whichever it may be, the central bank or ministry of finance, has control of monetary policy is referred to as the monetary authority of the country.

These monetary authorities have different levels of authority and rights assigned by the governments that create them. In the United States for example, the Federal Reserve System operates currency without direct oversight by the executive or legislative branches.

It is crucial to note that the monetary authority is always created and supported by its sponsoring government, as a result of which the independence and freedom can also be reduced or revoked by the legislative or executive authority that created it in the first place. However, looking at it from practical point of view, the revocation of authority does not seem very likely. More or less in all or say majority of western countries the monetary authority is by and large independent from the government.

It is also possible and does happen that several countries use the same name for their own distinct currencies. Example is Dollar itself. Canada and United States both use dollars but their values are different. One is called Canadian dollar while the other is US Dollar.

Exactly the opposite can also hold true - That several countries use the same currency Euro for example, or one country can declare the currency of another country to be used as legal tender for exchange. For example, El Salvador and Panama have declared U.S. currency i.e. dollars to be legal tender. Similarly between 1791?1857, Spanish silver coins were legal tender in the United States.

At various times under various situations, countries have either re-stamped foreign coins, or used currency board issuing one note of currency for each note of a foreign government held, just like the Ecuador currently does.