The legislature sets the unit of account that taxes get paid in. Setting that unit and imposing liabilities in it causes demand for the currency. Then you get a

The legislature sets the unit of account that taxes get paid in. Setting that unit and imposing liabilities in it causes demand for the currency. Then you get a cascade effect. That's why, in strong taxing nations, the currency border is very sharp. The one in Ireland for example between Sterling and the Euro. They also then set the relative price of everything by how many of their new currency units they issue in exchange for goods and services. If I tell you that you will get 20 groats for an hour of labour, you'll immediately know the price of everything in groats because you already have a relative map in your mind of how much things cost per unit of work required - or can quickly construct one from your own experiences. Every new currency has an infinite exchange rate to start with. It doesn't matter how many USD you have you can't get a new currency because they haven't issued it yet. If you analyse currency changes with these viewpoint tools you'll see how it works.