A monetary system which is determined by the fixed weight of silver and price of it is known as silver standard. This term is associated with coinage and exchange of silver into money. The import and export of silver around the globe is monitored which determines the silver standard.
In 1785, the silver standard was adopted by United States based on ‘Spanish milled dollar’. Presently no countries are operating on silver standards. By 1900, all the countries of the world had stopped using silver standard. The main reason behind the fall of silver standards is that silver with discoveries of new mines had lost its value.
The reserves of silver in the countries’ exchequers are the basis of its currency and against this it is possible to redeem issued bills at a fixed rate. When both gold and silver are used as the monetary standard it is termed ‘bimetallism’. Though U.S.A had initially thought of incorporating the bimetallic standard, it was not possible to carry it forward.
The
silver standard is determined by the silver resources of the world. Mostly the production of silver in Argentina, Mexico, Chile, Peru, Canada, U.S.A and Australia are taken into consideration as these are the major silver producing countries. The
silver standard is obsolete these days and gold standard has taken its place in most of the countries.
