But fiat money wasn't always this dominant. The US Dollar, for example, was once backed by gold. This was known as the "gold standard". Between 1879 and 1933, the United States directly linked the price of the dollar to a certain amount of gold. But the Great Depression of 1929 made it impossible to maintain the gold standard, and the system Gold Standard vs. Fiat. Gold standard or money backed by physical commodities bases its value on real assets like precious metals. For instance, one unit could cost the same as 1g of gold or 10g of silver. Any government or entities that wants to use gold-backed currencies need to have a huge gold reserve to back all the currency units they The Evolution From the Gold Standard to Fiat Currency is a Significant Shift in History The evolution from the gold standard to fiat currency is a significant event in the history of the world. The once-stable gold-backed currencies were replaced by the flexibility offered by fiat money which empowered central banks with greater control. Of course, that's no longer the case. Despite the fact that previous attempts in other countries to adopt fiat currency systems wreaked havoc on their economies, the U.S., under President The 1875-CC Liberty Head design The 1924 Double eagle, Saint Gaudens' design. Hard money policies support a specie standard, usually gold or silver, typically implemented with representative money.. In 1836, when President Andrew Jackson's veto of the recharter of the Second Bank of the United States took effect, he issued the Specie Circular, an executive order that all public lands had to be Fiat money is an alternative to commodity money, which is a currency that has intrinsic value because it contains, for example, a precious metal such as gold or silver which is embedded in the coin. Fiat also differs from representative money , which is money that has intrinsic value because it is backed by and can be converted into a precious Hyfv.

fiat currency vs gold standard