A currency is called a freely convertible currency when its holder can freely convert it into the currency of any other country.

According to the agreement of the International Monetary Fund, the so-called free convertibility means that there are no restrictions on the payment and capital transfer of frequent international exchanges. In other words, this currency can be used as a means of payment unconditionally at any time in frequent international exchanges, and the other party should unconditionally accept and recognize its legal value. We will not implement discriminatory monetary policy measures or multi-currency exchange rates. At the request of another member state, it is always obliged to exchange the domestic currency left by the other party in the current transaction. That is, the member countries participating in the agreement are obliged to accept their own currencies unconditionally.

At present, more than 50 countries in the world have accepted the terms of the International Monetary Fund's agreement on currency convertibility, that is, the currencies of these countries are considered to be freely convertible. Among them: US Dollar, Deutsche Mark, Japanese Yen, Swiss Franc, FRF, ITL, NLG, BEU, DKR, SKR and Norwegian Krone.

1999, the euro (EUR) became the official currency circulating in the euro zone, and also became a freely convertible currency that can compete with the US dollar internationally. At the same time, the currencies of some euro-zone countries gradually withdrew from the circulation field.