Quote from: Local on February 10, 2011, 07:04:06 PM

Quote from: ShadowOfHarbringer on February 10, 2011, 06:54:07 PM

Quote from: casascius on February 10, 2011, 05:24:20 PM

The exchange rate needs backing value to be real.

Just out of curiosity.

Can a currency be backed mostly or completely by another currency ? Has anything like that ever happened in history ?

I don't know, I'm seriously asking a question - this is not sarcasm or anything.

Gold was being used as a currency then FRN were created and backed by that currency, (...) Does that count? And now some nations currency are backed by FRNs.

I am not sure, but i guess yeah.
However that wasn't "clean case", because FRNs were also "legal tender" so that kind of adds purchasing power the the currency.