First of all, let’s introduce what a standard is: Once a certain commodity or commodities are specified as currency, the currency system is called the standard of that commodity or commodities. SO, the monetary system that uses gold as currency is called the gold standard. (Single standard system) The monetary system using silver as currency material is called the silver standard. (Monometallism) When the government clarifies that gold and silver are legal tender, it is called gold and silver bimetallism. (Bimetallism) The above mentioned all belong to the metal currency system. Monetary systems are divided into two categories: metal monetary systems and non-redeemable credit monetary systems. The unredeemable credit currency system uses banknotes that cannot be cashed as the standard currency. At the same time, banknotes are issued by the state monopoly and have unlimited legal solvency. Banknotes do not represent any metal currency and cannot be exchanged for precious metals such as gold at a fixed ratio. The gold and silver bimetal system is the most typical monetary system in the early stages of capitalist development (16th-18th). However, due to the inherent instability of this system, gold and silver often fluctuate due to changes in market prices, so the law of bad money driving out good money comes into play. Function: If gold is cheap, gold coins will flood the market; if silver is cheap, silver coins will flood the market. This cannot adapt to the development of capitalism. In the 19th century, starting from the United Kingdom, major capitalist countries successively transitioned to the gold standard, typically the gold coinage system. At this time, the issuance system of bank notes was also increasingly improved, and the external price comparisons of currencies of various countries were relatively stable. However, the contradictions of imperialism intensified, especially after the outbreak of World War I, the circulation of gold coins became very difficult, so the gold nugget standard and the gold exchange standard were successively established, but these two systems could not last for several years. The above three systems (gold coinage system, gold nugget standard, and gold exchange standard) actually form the three major classifications of the gold standard we have today. After the GREAT DEPRECIATION of 1929-1933 (a world-wide economic crisis), any form of gold standard no longer existed. What replaced it was a monetary system that did not honor bank notes. Since then, countries around the world have implemented this type of monetary system. The RMB takes the form of bank notes that are not redeemable. In addition, due to the needs of national conditions, my country's current currency system is a special currency system of "one country, four currencies", that is, different currency systems are implemented in Hong Kong, Macau, Taiwan, and the mainland. Haha, I started to study currency and banking by myself last week. I don’t know if the answer is comprehensive~~~The above is my understanding~~I hope it can help you~The following is what I searched online: Advantages and Disadvantages of my country’s Monetary System Now It is a monetary policy that pegs a basket of currencies. Of course, an exchange rate system that pegs a basket of currencies also has its inherent flaws: First, strictly pegging a basket of currencies will lose the initiative to adjust the exchange rate. Changes in the local currency exchange rate are based on the exchange rates of the currencies in the basket. Adjustments are made passively; secondly, changes in the local currency's exchange rate do not reflect the market supply and demand of the local currency. Therefore, the exchange rate system pegged to a basket of currencies is not in line with the direction of market-oriented or market-based reform. Third, pegging a basket of currencies cannot avoid the impact of non-exchange rate factors on the balance of payments. However, does the exchange rate system that is adjusted with reference to a basket of currencies avoid the disadvantages of pegging to a basket, but also loses some of the benefits of pegging to a basket? Comparing the possible movement patterns of the RMB exchange rate under these two exchange rate systems will help identify the pros and cons of "adjustment with reference to a basket of currencies." As mentioned earlier, in an exchange rate system that is strictly pegged to a basket of currencies, currency exchange rate changes are completely passive based on changes in the exchange rates of each currency in the basket. Under the reference basket exchange rate system, currencies will change in three ways: First, daily fluctuations, that is, daily fluctuations within plus or minus 3‰ centered on the closing price of the previous trading day. The second is to adjust the central parity rate with reference to the currency basket. That is, when the exchange rate of certain currencies in the currency basket fluctuates significantly, so that the closing price of the U.S. dollar against that currency cannot cover the range of fluctuations even at the end of the range, the monetary authorities may not use the closing price of the previous day as the next day's closing price. The central parity rate is determined by referring to the currency basket. The third is to expand the floating range of the exchange rate when necessary, that is, the monetary authorities can expand the fluctuation range to a larger range if necessary. Expanding the floating range requires corresponding reforms and adjustments to the foreign exchange trading market, the trading system between designated foreign exchange banks and residents and enterprises, the bank's foreign exchange position management system and the mandatory foreign exchange settlement and sales system, otherwise it will affect the transaction efficiency of the entire foreign exchange market. What needs to be emphasized is that even fluctuations within the daily range are not completely free fluctuations. The monetary authority does not just buy and sell at both ends of the range, but can also act as a member of the foreign exchange market and trade at any price within the range. Therefore, the monetary authority also has the de facto ability to determine the daily closing price. It can be seen that the biggest difference between adjustment with reference to a basket of currencies and strictly pegged to a basket of currencies is that the former retains the initiative and control of the monetary authority to adjust the exchange rate, but cannot enjoy the benefits of stabilizing exchange rate expectations, while the latter It replaces the central bank's arbitrary intervention in the exchange rate with a clear rule, which can quickly stabilize exchange rate expectations, but at the same time loses the initiative of the monetary authorities to adjust the exchange rate. This is actually an age-old policy dilemma of compromise between camera decisions and rules.

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