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The Canadian Dollar

As the #7 currency in the world, the Canadian dollar has 5.3 percent share in daily currency transactions in the world. Until the early 19th century, a number of different currencies, British, French, and local currencies, were used in the Canadian provinces. In the years leading up to the Confederation, most of the country was organized as small rural settlements spread over a large area, which made branch banking a practical approach.

During the 18th and early 19th century, the branch banking worked well. Then, bank runs reduced confidence in the system, and the idea that government should issue currency started gaining support. In 1871, the Dominion government passed the Uniform Currency Act.

The establishment of a central bank took a little more. The Great Depression of the early 1930s convinced policy makers to establish a central bank. In March 1935, the Bank of Canada opened its doors as a privately owned institution.

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