From Silver to Gold: The Currency Reforms in Asia Before 1914

Standard silver prices began rapidly declining in the London silver market in the 1870s. Most countries and colonies that had previously adopted bimetallism or the silver standard were forced to reform their currency systems and adopt the gold standard. However, in Asia, local and regional merchants, as well as the local and regional government and most authorities, continued to use silver currency as a primary medium of exchange. Adopting the gold standard was less straightforward for Asian economies than for continental Europe. However, between the end of the nineteenth century and the beginning of the twentieth century, most colonies and countries in Asia adopted the gold-exchange standard. This reform contributed to expanding the international trade between Asia and the rest of the world and also promoted intra-Asian trade at the beginning of the twentieth century. In other words, the gold-exchange standard, which had both the function of the gold standard and a large amount of silver circulation, was one of the most important institutional fundamentals for the development of Asian economies at the beginning of the twentieth century.