The History of the US Dollar

The History of the US Dollar

The US dollar was officially established with the Coinage Act of 1792, which created the United States Mint and standardized the country’s currency system. Initially, the dollar was backed by gold and silver, a system known as the gold standard. Under this system, paper currency could be exchanged for a fixed amount of gold or silver.

However, in 1971, President Richard Nixon ended the gold standard, transitioning the US dollar into a fiat currency—meaning its value is no longer tied to a physical commodity but rather determined by supply, demand, and government policy. Since then, the dollar’s value has fluctuated based on economic conditions, interest rates, inflation, and geopolitical events.