Pound sterling

Unofficial gold standard
In 1663, a new gold coinage was introduced based on the 22 carat fine guinea. Fixed in weight at 44½ to the troy pound from 1670, this coin's value varied considerably until 1717, when it was fixed at 21 shillings (21/-, 1.05 pounds).[20] However, despite the efforts of Sir Isaac Newton, Master of the Mint, to reduce the guinea's value, this valuation overvalued gold relative to silver when compared to the valuations in other European countries. British merchants sent silver abroad in payments whilst goods for export were paid for with gold. As a consequence, silver flowed out of the country and gold flowed in, leading to a situation where Great Britain was effectively on a gold standard. In addition, a chronic shortage of silver coins developed. This shortage was aggravated by the fact that silver was the only commodity accepted by China for exporting goods during this period. From the mid-17th century, around 28 million kilograms (62 million pounds) of silver was received by China, principally from European powers, in exchange for Chinese tea and other goods. In order to trade with China, Great Britain had to first trade with the other European nations to receive silver, which led to the East India Company redressing this trade imbalance through the indirect sale of opium to the Chinese.