DEFINITION of 'Silver Standard'
A monetary system in which a country's government allows its currency to be freely converted into fixed amounts of silver, and vice versa. Under the silver standard, an exchange rate would be determined by the economic difference for a fixed amount of silver between two currencies. The use of a silver standard was widespread over centuries before being abandoned globally in the early 20th Century.
BREAKING DOWN 'Silver Standard'
The silver standard is believed to date back to ancient Greece, where silver was the first metal to be used as a measure of currency. The silver standard was subsequently adopted following the fall of the Roman empire in regions ranging from China, India, Bohemia, Great Britain and the United States. The silver standard officially came to an end when it was abandoned by China and Hong Kong in 1935, when the gold standard was adopted.