There was a time in history when the gold standard existed as a monetary system, and is still considered a good one. This monetary system required all the countries taking part in this system, to pledge that they will keep the rate of their currencies in terms of gold.
The gold standard was first adopted by the United Kingdom. In the 1790s, there was a great shortage of silver in the UK, and so it started a major restructuring programme through which, gold coins were introduced. In’44, the Bank Charter Act was introduced according to which, the Bank of England notes, backed by gold, were made the legal standard in the country. The United States at that time was following a bi-metallic standard, which is the use of both gold, and silver.
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