There is no standard disambiguating form, but the abbreviations Can$, CA$ and C$ are frequently used for distinction from other dollar-denominated currencies (though C$ remains ambiguous with the Nicaraguan córdoba).

Owing to the image of a common loon on its reverse, the dollar coin, and sometimes the unit of currency itself, may be referred to as the loonie by English-speaking Canadians and foreign exchange traders and analysts.

The British North American provinces, for reasons of practicality in relation to the increasing trade with the neighbouring United States, had a desire to assimilate their currencies with the American unit, but the imperial authorities in London still preferred sterling as the sole currency throughout the British Empire.

In 1851, the Parliament of the Province of Canada passed an act for the purposes of introducing a sterling-based unit,[citation needed] with decimal fractional coinage.

The idea was that the decimal coins would correspond to exact amounts in relation to the U.S. dollar fractional coinage.

The British government in principle allowed for a decimal coinage but nevertheless held out the hope that a sterling unit would be chosen under the name of "royal".

[citation needed] However, in 1857, the decision was made to introduce a decimal coinage into the Province of Canada in conjunction with the U.S. dollar unit.

In 1860, the colonies of New Brunswick and Nova Scotia followed the Province of Canada in adopting a decimal system based on the U.S. dollar unit.

In 1871, Prince Edward Island went decimal within the U.S. dollar unit and introduced coins in the denomination of 1 cent.

The Canadian origin of this term derives from a coin struck by the Hudson's Bay Company during the 17th century with a value equal to the pelt of a male beaver – a "buck".

The French pronunciation of cent (pronounced similarly to English as /sɛnt/ or /sɛn/, not like the word for hundred, /sɑ̃/ or /sã/)[13] is generally used for the subdivision; sou is another, informal, term for 1¢.

25¢ coins in Quebec French are often called trente sous ("thirty cents") because of a series of changes in terminology, currencies, and exchange rates.

The standard set of designs has Canadian symbols, usually wildlife, on the reverse, and an effigy of Charles III on the obverse.

A large number of pennies, nickels, and dimes are in circulation bearing the effigy of Elizabeth II, and occasionally some depicting George VI can be found.

The obverse carries an image of King George V and on the reverse is a shield with the arms of the Dominion of Canada.

In 1942, as a wartime measure, nickel was replaced by tombac in the 5¢ coin, which was changed in shape from round to dodecagonal.

Legal tender of Canadian coinage is governed by the Currency Act, which sets out limits of:[26] Retailers in Canada may refuse bank notes without breaking the law.

For example, stores may refuse $100 banknotes if they feel that would put them at risk of being counterfeit victims; however, official policy suggests that the retailers should evaluate the impact of that approach.

In the case that no mutually acceptable form of payment can be found for the tender, the parties involved should seek legal advice.

[29][30] Canada was favoured due to its northern geography and similar resource-based economy, in addition to its relative economic stability.

The Bank of Canada has no target value for the Canadian dollar and has not intervened in foreign exchange markets since 1998.

[35] The Bank's official position is that market conditions should determine the worth of the Canadian dollar, although it occasionally makes minor attempts to influence its value.

[37] The Canadian dollar traded at a record high of US$2.78 in terms of American greenbacks on July 11, 1864, since the latter was inconvertible paper currency.

Unlike other currencies in the Bretton Woods system, whose values were fixed, the Canadian dollar was allowed to float from 1950 to 1962.

[38] The Canadian dollar fell considerably after 1960, and this contributed to Prime Minister John Diefenbaker's defeat in the 1963 election.

The Canadian dollar returned to a fixed exchange rate regime in 1962 when its value was set at US$0.925, where it remained until 1970.

[39] The Canadian dollar fell in value against its American counterpart during the technological boom of the 1990s that was centred in the United States, and was traded for as little as US$0.6179 on January 21, 2002, which was an all-time low.

[40] Since then, its value against all major currencies rose until 2013, due in part to high prices for commodities (especially oil) that Canada exports.

[43] On November 7, 2007, it hit US$1.1024 during trading, a modern-day high[44] after China announced it would diversify its US$1.43 trillion foreign exchange reserve away from the U.S. dollar.

The Canadian dollar (as a regional reserve currency for banking) has been an important part of the British, French and Dutch Caribbean states' economies and finance systems since the 1950s.