A blocked currency is one in which foreign currency is not allowed to be used in bank accounts by the government. It can be used for internal transactions, but it cannot be traded on the Forex market.
During the war years, England imported goods from the countries of the sterling bloc without paying for them. Block accounts in London banks were credited with large amounts of debt owed to supplying countries.

A blocked currency is one which is not allowed to be exchanged by being converted into other currencies as is normally done on the exchange market, thus the name. This is due to exchange controls.

Blocked currency refers to money that cannot be freely transferred, converted, or taken out of a country due to government restrictions. These controls are usually imposed to protect foreign exchange reserves, stabilise the local currency, or manage economic crises. As a result, individuals or businesses may earn income in a country but be unable to repatriate or convert it into another currency.

Blocked currencies often arise in countries with strict capital controls, political instability, or balance of payments problems. Foreign investors may face limits on profit repatriation, while exporters may be required to hold funds in local accounts. Sometimes, blocked funds can only be used within the issuing country or exchanged through special government-approved channels.

This situation increases financial risk for international traders and investors, as access to funds becomes uncertain. It can also discourage foreign investment and reduce cross-border trade activity.