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In the 19th century, the GBP took the center stage as a globally used currency. Originating as commodity money, by the time it became globally accepted, it did not consist of any precious metal, but appeared in the form of Bank of England notes baring the right to be converted to gold, known as the “gold standard”. The fact that Britain was by far the most predominant global economic force at the time made the Pound globally accepted. At some point, it started making sense to use the Pound not only as currency, but as a mean of reserve - thus establishing the Pound as a “reserve currency”. When many global central banks began doing so, it enabled the BoE to issue more notes, without fearing the subsequent inflation.
No empire reigns forever, and the Second World War left the United Kingdom battered and bruised. The U.S. used this as an advantage at the 1944 Bretton Woods Conference, and set the dollar as the world’s primary exchange currency, by fixing its rate with that of 44 Allied nations, and setting a gold standard of 35 dollars per an ounce of gold. This act made the dollar the new global reserve currency, a status maintained up until this very day.
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