The world community includes not so many countries whose monetary system has for decades been based on the emission of the same currency. The leading position in the list of such powers is Great Britain. For more than eleven centuries, gentlemen from the Old World have been holding an English pound in their purses.
Name origin history
Long before the territorial and administrative structure of Great Britain took on a distinct outline of a centralized great state, these banknotes began to circulate on its lands. This name of the currency is far from accidental. There are several options for choosing it. One of them is the "weight" option. It is believed that initially pounds were minted from one pound of silver. It turned out about 240 coins. Sterling is the second name of the received metal currency. From here came the name of the currency that has come down to us.
There is also an intermediate unit between the pound and the pence. It is called shilling. It includes 12 pence. Thus, each British pound consists of 20 shillings.
Gold coins and paper notes
For four centuries (from 14 to 18), a bimetallic cash circulation system has been operating in the country. In commodity-money relations, there was a golden English pound and silver bargaining shillings and pence. In addition to metallic banknotes, paper money was also in circulation on the territory of the country. The dignity of each bank ticket was backed by gold. This continued during the war of England and France, although it was impossible to exchange banknotes for valuable metal then. The restoration of the system of free and duty-free purchase and sale of gold coins using paper banknotes was put back into circulation in the 1920s.
At the same time, a clear balance was established between exchanged banknotes and stocks of valuable metals. It is understood that the issue of notes should not exceed the presence of gold. This rule was violated only during the economic crisis. There were three such moments. The Great Crisis of 1847, the First World Crisis of 1857 and the Luxembourg Crisis of 1866, which had a deplorable effect on the economy of England. To stabilize the financial situation, the country's parliament gave permission that the British pound, issued on paper, should not be properly supported by gold. That is, the issue of banknotes exceeded the permissible volumes.
Loss of status and current status
Until the outbreak of World War I, paper bank tickets and gold coins were circulated throughout the country. In 1914, the minting of metallic banknotes was stopped, and those in circulation were withdrawn. At the same time, in order to cope with military expenses, the country's parliament began to issue treasury tickets. Those, in turn, were withdrawn from circulation in 1928, and in their place again came the national currency - the British pound. Even despite the crisis of the post-war years, the government of the country used only one lever of influence on the monetary unit - the restoration of the monetary system. Gold was again put into circulation, but not coins, but bullions. Backed by valuable metal, paper British pounds gained strength, but could not again become the leading reserve currency of world banking operations.
At the moment, the United Kingdom is part of the European Union. Therefore, it is not surprising that the euro has circulation in the country. However, the only national currency remains the British pound. The country does not seek to switch to the euro yet. The UK explains this by the fact that in this step there is no benefit for the economic situation in the country. At the same time, for one English pound at a cash exchange you can get about 1.2 euros.