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Simple English definitions for legal terms
blocked currency
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A quick definition of blocked currency:
Blocked currency is money that can only be used within the country where it is located, due to government restrictions. It is like having money that can only be spent in one store. This is different from national currency, which is approved by a government and can be used as a medium of exchange. Soft currency is not backed by reserves and can fluctuate in value, while hard currency is backed by reserves, such as gold and silver. Fractional currency is paper money worth less than one dollar, and current-cost accounting is a way of measuring assets in terms of replacement cost.
A more thorough explanation:
Definition: Currency or bank deposits that are restricted by the government and can only be used within the country where they are located.
Examples:
- During times of political unrest, a government may block the currency to prevent citizens from taking their money out of the country.
- Foreign companies operating in a country may have their profits blocked and unable to be transferred out of the country due to government restrictions.
The examples illustrate how blocked currency is a form of government control over the flow of money in and out of a country. It can be used as a tool to stabilize the economy or prevent capital flight during times of crisis.