After World War 1, all the belligerent countries except U.S.A. Could not obey the discipline of the gold standard and so had to abandon this monetary system. The appeal of the yellow metal, however, lingered in popular memory. Efforts were made to re-establish gold standard in May, 1925, by Great Britain. The structure of gold standard was now named as gold bullion standard. The main characteristics of gold bullion standard: Gold coinage is discontinued and gold coins do not circulate. The actual currency consists of paper currency notes and other token coins. The central bank of the country is under legal obligation to convert them into gold bullion.Coinage of gold is not free. The holder of gold bullion is not entitled to get it converted into gold coins. Government buys and sells all offerings of gold at a fixed price. The seller of gold is paid in other forms of money which may be paper money or bank money.Gold reserves are held in the form of bullion bars in the vault of the central bank.There are no restrictions on the use or hold of gold bullion on the individuals. The private citizens can export the gold if they so desire.
