A currency that is free from legal and regulatory restrictions to be converted into another currency. A permitted currency is often a minor currency, and has a fairly active market for exchanges with major currencies. 



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Transactions between a major currency, such as the U.S. dollar, and a permitted currency are smoother than ones between a major currency and a tightly-controlled one because the permitted currency is more liquid. In addition, some transactions require the settlement to be made in a major currency.