I know it’s the UK currency but if you look at a ten pound note it says on it “I Promise to Pay the Bearer on demand the sum of ten pounds”.
If I walked into the Bank of England with a tenner and asked for ten pounds, what would I get? Apart from some funny looks.
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A ten pound note is essentially a voucher, issued and guaranteed by the Bank of England, which any merchant will exchange for £10 of goods.
Originally the BoE may have given you £10’s worth of gold, which is “independent” of the currency and valuable across the world. We dropped the gold standard in 1931, and it’s now worth £10 because everyone believes it is.
“Sterling” is actually the name of the currency, and is divided into pounds and pence. The name maybe come from an old Norman coin which had a “steorra”, or star, on it, hence “star-ling”.
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