CONVERTIBLE PAPER MONEY INCONVERTIBLE PAPER MONEY

46. CONVERTIBLE PAPER MONEY
INCONVERTIBLE PAPER MONEY
1.      Meaning
It is that money which can be converted into standard money on demand.


2.      Backed by Reserves
This money is normally backed by gold or silver reserves. Therefore, it can be converted into gold or silver.
3.      Current Usage
Nowadays, convertible paper money is not in use.


It is also known a fiat money, this money is sanctioned on the command of Government.



This money is not backed by gold or silver reserves. Therefore, it cannot be converted into gold or silver.


Nowadays, inconvertible paper money is in use in almost all countries.