15.1 The present units of money in the currency of the United Kingdom are the pound sterling and the penny or new penny,1 the values of which are supported by government decree and public faith in their worth. Paper money issued by the Bank of England is no longer convertible into gold at the demand of the holder, but derives its value in England and Wales by having been designated as legal tender.2 As such, it is fiat or fiduciary money, having no, or a negligible, intrinsic worth.3 Similarly, as seen in Chapter 3, whereas for many centuries international exchange rates reflected the fact that the coins of different countries were in essence just different names for various quantities and grades of precious metal, nowadays sterling coins in daily use are no longer composed of precious metals, nor are they backed by a physical commodity.4 Their practical value arises in the same way as with banknotes, as a medium of exchange enabling their owner to acquire goods and services, because other people also see them as desirable for the same reason; and