Representative money is money that consists of token coins, other physical tokens such as certificates, or even non-physical "digital certificates" (authenticated digital transactions) that can be reliably exchanged for a fixed quantity of a commodity such as gold, silver or potentially , oil or food. The value of representative money stands in direct and fixed relation to the commodity that backs it, while not itself being composed of that commodity.[19]
Historically, the gold standard, based on paper notes that were normally freely convertible into fixed quantities of gold, was the most common form of representative money. It was adopted by most of the industrialized countries during the 18th and 19th centuries, but fell out of favour in the 20th century.[20]
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