A central bank is a monetary authority that has the power to issue fiat money and typically to regulate the amount of currency circulating in the financial system. Central banks also typically act as a bank for their national government and hold foreign reserves.
Many countries have adopted the idea of having a central bank to control monetary policy and provide other financial services to the government and commercial banks. Typically, these functions are carried out by a single institution, although some countries such as Australia have had more than one central bank.