What does «desmonetización» mean in Spanish?
- Action and effect of demonetizing.
- Abandonment of a given metal as a monetary standard or withdrawal from circulation of the currency of that metal. A demonetized metal is no longer a measure of the monetary unit; it loses the right of free coinage and its status as legal tender. In 1873 the silver dollar disappeared from the list of coins because U.S. production of that metal was so low that virtually no minting was taking place. Governments can also withdraw coins from circulation, as England did with all gold coins prior to those of Queen Victoria (1889).
- The act of stripping a monetary unit of its status as legal tender. It occurs whenever the national currency is changed: current forms of money are withdrawn from circulation, often to be replaced by new banknotes or coins. Sometimes, a country completely replaces the old currency with a new currency. The opposite of demonetization is monetization in which a form of payment is established as legal tender. Removing the legal tender status of a currency unit is a drastic intervention in an economy because it directly affects the medium of exchange used in all economic transactions. It can help stabilize existing problems, or it can cause chaos in an economy, especially if undertaken suddenly or without warning. That said, demonetization is undertaken by nations for a number of reasons.