Gold Exchange Standard

The British gold standard finally collapsed in 1931, but the system was revived at the 1944 international conference held in Bretton Woods, New Hampshire. Here, a revised gold standard was agreed upon: the exchange rates of the national currencies of the major economic powers were pegged to the dollar and the dollar was convertible into gold at a fixed price of USD 35 per ounce. The Bretton Woods monetary system is therefore sometimes called the gold exchange standard. Central banks stood ready to provide dollars in exchange for their national currency and vice versa.

The Bretton Woods monetary system collapsed in 1971 and since then the currencies of the major economies have remained pure fiat money. In addition, most countries have allowed the exchange rates of their currencies to float.

The evolution of money has not stopped. These days, various forms of intangible money have emerged, among them so-called “electronic money” (“e-money”), or electronic means of payment, which first appeared in the 1990s. This kind of money can be used to pay for goods and services on the internet or using other electronic media.

Upon receiving authorization from the buyer for the payment to take place, the vendor contacts the issuing bank and is transferred the funds. At present there are various card-based electronic money schemes in Europe, generally operated by financial institutions.