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What Are Currency Dealers?

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  • Written By: K. Kinsella
  • Edited By: Allegra J. Lingo
  • Last Modified Date: 15 September 2016
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Currency dealers are people who buy and sell different kinds of currency. Some currency dealers trade foreign currency, and others trade types of currency that are no longer in general circulation. Many dealers work alone, and other dealers work for major firms that trade currencies on international markets.

Every nation in the world has some form of currency, but in order to buy goods with cash when overseas, travelers generally have to exchange the currency from their own nation with the currency of the nation they are visiting. Currency dealers have supplies of local currency and buy foreign currency from travelers. The dealer and the person exchanging the currency must agree on an exchange rate, and dealers price the exchanges so that they can generate a profit by purchasing other currencies at low prices and selling those currencies to other people for higher prices. Exchange rates used on international markets where nations buy and sell currency form the basis of currency exchange rates, but dealers do not have to strictly follow these exchange rates when buy or selling currency.

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In most countries, people who buy and sell foreign currency have to be licensed and comply with laws requiring businesses that handle large volumes of cash to keep records of customer transactions. Currency dealers have to provide information relating to currency exchanges to government departments that are tasked with preventing tax evasion and money laundering. Rules in some countries limit the fees that foreign currency dealers can charge to ensure that foreign people who are unfamiliar with the local currency do not end up paying excessive sums to change their money.

Some currency dealers collect ancient coins, bills that are no longer in circulation, and commemorative coins. These dealers primarily sell coins and bills to currency collectors, some of whom willingly pay large sums of money for rare or unusual types of currency. Since the currencies being traded are no longer in circulation, the dealers can decide how much to charge for coins and bills because there are no exchange markets to use as a reference point.

Laws in some countries that are designed to control the sale of antiquities prevent currency dealers from selling ancient currency. Dealers can sell or donate these items to museums, but in some instances rare and unusual coins end up being sold on the black market along with other rare antiquities. Ancient coins that there are abundant supplies of are allowed to be sold, and some museums that hold antiquities even act as currency dealers by selling coins to tourists.

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