What are the characteristics of useful currency? Solution Characteristics of a useful currencies are: 1. Durability - The currency should retain its form, shape etc for a long time. For eg, suppose you put a $10 note in a book, and forgot about it. When you find it again after say 3-4 years, it shouldn\'t have soiled or deteriorated. Thus, currency notes should be of high quality paper that can survive for years. Coins made of metals like gold, silver, nickel, steel are pretty durable. 2. Divisibility - The currency should provide the means for people to divide it into small amounts for use as medium of exchange. Thus, someone who has a $100 note and buys a product that costs says $7.99 should be able to get $92.01 change comprising of pennies/dimes, one dollar/ten dollar/twenty dollar notes etc. 3. Portability - It should be easy to move the currency from one place to another. It would be very hard to carry $100 if there were only pennies. Thus, the paper currencies became more prominent than coins in the last 100-200 years. 4. Security i.e Non counterfeitability - The currency should be only printed by the central bank. It should be practically impossible for someone else to copy the currency, or else it would lose its credibility, and people will shift to a currency that is more secure. Some of the other characteristics - It should be Generally Accepted for use Stable - Its value should not fluctuate too much over time Scarce - Earning it should be difficult. If it was very easy to earn, it would lead to high inflation and its value would erode rapidly Economical to produce - Printing currency notes/minting coins should not cost more than their respective value.