Commodity Money
Commodity money consists of physical items that have a value or utility other than as a form of exchange medium.
It’s primary value lies in its intrinsic value, as opposed to Fiat Money.
Tip
In Commodity Money, the value of the currency is tied to the value of the commodity.
Ex:
- Gold
- Silver
- Tea
- Alcohol
- Seashells
Why seashells?!
I think it was also for jewelry, like gold.
Example
A 35/ounce under the Bretton Woods system post-WWII until 1971).
- If someone presented $35 in US dollars to the US Treasury, they could exchange it for one ounce of gold.