Portal:Numismatics/Selected article/1

The gold standard is a monetary system in which the standard economic unit of account is a fixed weight of gold. Under the gold standard, currency issuers guarantee to redeem notes in that amount of gold. Governments that employ such a fixed unit of account, and which will redeem their notes to other governments in gold, share a fixed-currency relationship. Supporters of the gold standard claim it is more resistant to credit and debt expansion. Unlike a fiat currency, the money backed by gold cannot be created arbitrarily by government action. This restraint prevents artificial inflation by the devaluation of currency. This is supposed to remove "currency uncertainty," keep the credit of the issuing monetary authority sound, and encourage lending. Nevertheless, countries under the gold standard, like countries with fiat currencies, underwent debt crises and depressions throughout the history of its use.

The gold standard is no longer used in any nation, having been replaced completely by fiat currency. It still is in use by private institutions in the supply of digital gold currency, which uses gold grams as money. Due to its rarity, durability, and the general ease of identification through its unique color, weight, ductility and acoustic properties, gold is a commodity that merchants and traders came to select as a common unit of account - thus it has long been used as a form of money and store of wealth.