Gold standard, monetary system in which a standard currency unit equals a fixed weight of gold. Since World War II most countries no longer have an internal gold standard, but do use a limited international standard to convert their currencies into gold or U.S. dollars for international payments. In 1976 the International Monetary Fund created a system of controlled floating rates that diminished the importance of gold in international transactions. The U.S. went on the gold standard in 1900, but the Gold Reserve Act of 1934 prohibited the redemption of dollars into gold. And in 1970 the U.S. Treasury ended its requirement that Federal Reserve notes be backed 25% by gold deposits, in effect taking the U.S. completely off the gold standard.
See also: Money.