A monetary system is a framework that a country uses to manage its currency, including the creation, distribution, and regulation of money. It typically involves a central bank, such as the Federal Reserve in the United States, which oversees monetary policy and ensures stability in the financial system. The monetary system also includes various forms of money, such as coins, banknotes, and digital currency. In a monetary system, money serves three main functions: a medium of exchange, a unit of account, and a store of value. This allows individuals and businesses to conduct transactions, measure the value of goods and services, and save for future needs. The effectiveness of a monetary system is crucial for economic growth and stability.