Though in Great Britain currency notes from the Bank of England were made fully redeemable for gold during 1821, the first full-fledged gold standard was adopted by France in 1878. Later on United States adopted it in 1879 and Russia and Japan in 1897, Switzerland, and many Scandinavian countries by 1928.
An international Gold Standard is said to exist when;
- Gold alone is assured of unrestricted coinage
- There is a two way convertibility between gold and national currencies at a stable ratio
- And gold may be freely imported and exported.
In order to support unrestricted convertibility into gold, bank notes need to be backed by gold reserve of a minimum stated ratio.… Read the rest