1. Precious metals, gold and silver, can be minted freely. Anyone can hand over gold nuggets to the national mint to be minted into gold coins according to the gold content of the standard currency.

2. Precious metals, gold and silver, are currencies with unlimited legal compensation and have the right to unlimited means of payment.

3. The currency reserves of various countries are precious metals gold and silver, and international settlements also use precious metals gold and silver. Precious metals gold and silver can be freely exported and imported.

4. Since precious metals gold and silver can be freely transferred between countries, this ensures the relative stability of the foreign exchange market and the unity of the international financial market.

Extended information

Different forms of currency are essentially the same. In the past, due to people's unclear understanding of the nature of currency, they mistakenly divided currencies into different types from different perspectives. For example, currency was divided into two categories: debt currency and non-debt currency based on the commodity value of currency. The exchange ratio is divided into convertible currencies and non-convertible currencies.

Formally, according to the commodity value of currency, it can be divided into physical currency and formal currency. Physical currency itself is a special commodity that contains value, such as sheep, precious metals, etc.; while formal currency itself has no value. Its value is contractually agreed upon and has only contractual value.

The two have different forms, but they are essentially unified, that is, they are both agreed to be the medium of exchange and both have contractual value. The purchasing power of currency is determined by the contract value of currency.

However, the purchasing power of physical currency will also be affected by the value of its own commodities. Usually the commodity value of physical currency is less than its contractual value as currency.

Before the nature of money is confirmed, the argument of debt currency has its reasonable side. It solves the problem of exchange of banknotes and commodities without commodity value, that is, it answers the question of why banknotes can purchase commodities.

However, although banknotes have certain similarities with IOUs, there are essential differences:

As an IOU, the items repaid usually cannot be less than the items borrowed, which is common with banknotes. The existence of devaluation is contradictory. (If "A sells 5 eggs to the market" is regarded as "lent 5 eggs to the market", and the banknotes he gets from selling the eggs are regarded as IOUs, then when he asks the market to repay, that is, when he uses these currencies, He should get at least 5 eggs, and if interest is taken into account, he should get more.

But the reality is that due to the devaluation of banknotes, A will not be able to buy 5 more eggs with the currency he got from selling the eggs earlier. Eggs (paper money always loses value gradually in the long run).