Capital Account Convertibility is the state where capital controls are not present. For millennia, nation states did not interfere in the decisions of citizens about where their wealth would be placed; where citizens were free to engage in financial transactions across the boundary. In the 20th century, capital controls were introduced (originally by Nazi Germany and Soviet Russia) and were proven technologically feasible. In the post-war years, capital controls were in use in most countries. By the late 1970s, capital controls began to be removed to a point where by the early 2000s, most countries have limited or no controls, and are hence back to the state of `convertibility'. Capital controls are restrictions on the trade of assets across international borders. ...

In the international landscape, the term `capital controls' is used more. In India, the term `capital account convertibility' is often used.

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