What happens to physical money exchanged in a foreign country? Is it eventually returned to its country of origin?


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Didge Doo Profile
Didge Doo answered

Hi Indy. Welcome to Blurtit. Thanks for such an interesting question.

I'm not sure if we'll be able to help you with this. We really need somebody skilled in the financial markets and after trying several searches I haven't come up with what you want.

Probably the majority of the world's currency doesn't exist in the form of actual bank notes or precious metals; it exists only as electronic digits floating around the various financial systems.

Conventional banking has done this for many years, using Telex and private teleprinter networks long before the Internetmade instant communication possible.

Then there's the Hawala system which is began in Asia and the Middle East but is now used around the world. Money is transferred without the money actually being moved.

And today we have Bitcoins -- one of the big growth areas. It's useful on both the Internet and the Dark Web (or Deep Web).

Hawala and Bitcoins have been linked to criminal activity but they are both excellent systems with great legitimate use.

And, of course, none of that really answers your question. I imagine that foreign banknotes would be stored in the vault of the bank/country concerned and would ultimately be exchanged with the home country when they were no longer useable. In the meantime, just having them in the vault would be surety against any electronic transfers done against their value.

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