What is bimetallism?

Bimetallism (or double pattern) is a coinage in which two modes of payment are used together (both gold and silver). These modes of payment will be used as payment currencies, and the relevant economic and financial institutions must establish the relationship between the two metals in order to be able to safeguard and establish some exchange rates reasonable.

A monetary unit in a bimetallic model must be defined by the use that is made of both silver and that of gold. Thanks to both elements, we will be able to establish the pattern to follow for the exchange and payment of the different goods and services that exist in a certain country (or area in which this model is used).

Thanks to the legal assignment of value, both of one material and another, the operation of the bimetallic system can be established, in which there is a gold-silver exchange relationship. In this way, the functionality, stability and development of the double pattern model are established.

Advantages of the bimetallic model

The main advantage we find when using this model is that we can counteract instability or eliminate it in situations where risk or economic instability is present. If gold or silver suffer a drop in value, we will be able to offset the losses with a different metal, something that cannot happen in a single metal model system (such as the Gold Standard).

On the other hand, its advantages were attenuated since they had more resources as they were two metals that were taken into account as transaction elements. While, on the other hand, the experience of the years has been able to tell us that being able to carry out this model is, in addition to being complex, not very efficient for the very fluid and modern economies in which we live.

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