The first secured banknotes
Posted: Wed Dec 18, 2024 5:14 am
In Russia, the first paper banknotes backed by gold and silver were put into circulation in 1769 by decree of Catherine II. They were called banknotes and were issued in denominations of 25, 50, 75 and 100 rubles. By presenting a banknote, a person received the exact amount of precious metal. Banknotes were withdrawn from circulation on January 1, 1849.
For a long time, many countries had a gold standard , when banknotes were backed by the country's reserves. And it was they who limited the issue of paper money: banknotes could not be issued more than the treasury british indian ocean territory business email list contained collateral. The Great Depression that occurred in America in 1929 showed the imperfection of the system and that gold reserves do not guarantee stability.
The transition to a new economy and fiat money occurred in 1971, when most countries abandoned the gold standard, switching to the Jamaican monetary system (still in effect, but increasingly criticized and in need of revision): gold had to be constantly replenished in the treasury, and its reserves were running out.
Nowadays, banknotes are not backed, and precious metals themselves are mostly a simple and reliable way to invest .
There are two opinions:
the commodity-currency system, the gold standard's supporters are convinced, is more reliable because it is backed by precious metals;
Their opponents rely on the fact that gold prices are always unstable, and this directly affects the value of both secured and fiat money.
However, the fiat system allows governments to act flexibly during financial crises.
For a long time, many countries had a gold standard , when banknotes were backed by the country's reserves. And it was they who limited the issue of paper money: banknotes could not be issued more than the treasury british indian ocean territory business email list contained collateral. The Great Depression that occurred in America in 1929 showed the imperfection of the system and that gold reserves do not guarantee stability.
The transition to a new economy and fiat money occurred in 1971, when most countries abandoned the gold standard, switching to the Jamaican monetary system (still in effect, but increasingly criticized and in need of revision): gold had to be constantly replenished in the treasury, and its reserves were running out.
Nowadays, banknotes are not backed, and precious metals themselves are mostly a simple and reliable way to invest .
There are two opinions:
the commodity-currency system, the gold standard's supporters are convinced, is more reliable because it is backed by precious metals;
Their opponents rely on the fact that gold prices are always unstable, and this directly affects the value of both secured and fiat money.
However, the fiat system allows governments to act flexibly during financial crises.