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demonetization

demonetization (dēˌmŏnˌətəzāˈshən) [key], governmental withdrawal of the monetary quality from particular coinage or precious metal. By demonetization former money is no longer legal tender, although in certain cases it may still be used as money of exchange, i.e., the actual metallic value may sometimes be accepted in discharge of indebtedness. However, such was not the case with regard to the demonetization (1933) of U.S. gold. The demonetization law stipulated that gold may not lawfully be used in domestic exchange, although it may be purchased for shipment abroad. Other instances of demonetization were the American conversion (1873) of silver into money of exchange and the similar British conversion (1889) of pre-Victorian gold coins. See money.

The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.

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