What does the term “currency exchange” refer to?

The term "currency exchange" refers to the process of converting one currency into another. This is typically done in foreign exchange markets where currencies are traded, allowing individuals and businesses to exchange their money based on the current exchange rates. Currency exchange is essential for international travel, trade, and investment, where different countries use different currencies. This process involves buying and selling currencies, and the exchange rate determines how much of one currency you will receive for another.

In contrast, the creation of digital currencies relates to the development of new forms of money that may operate independently of traditional currencies, but this does not define currency exchange itself. Regulation of foreign investments pertains to laws and guidelines that govern investment activities across borders, not the mechanics of changing one currency for another. The use of currency in local markets focuses on how currencies are utilized within specific regions without touching upon the broader aspect of currency conversion that happens internationally.