Silver certificates were a type of representative currency that the United States issued between 1878 and 1964 as part of its circulation of paper currency. They were redeemable for their face value in silver dollar coins and later in raw silver bullion. The decision to discontinue silver certificates was a component of a broader shift in U.S. monetary policy.
In the mid-20th century, the U.S. began to move away from precious metal-backed currency towards a fiat system. This transition was initiated by the Silver Purchase Act of 1934 and was solidified by the Coinage Act of 1965. By the 1960s, the U.S. government was facing a shortage of silver due to increased industrial demand. Additionally, the cost of silver production was rising, making it economically unsustainable to continue minting silver coins and backing paper currency with silver reserves. This shift to a fiat currency allowed the U.S. government greater flexibility in monetary policy, as the value of the currency was no longer tied to a finite resource like silver or gold. Consequently, the issuance of silver certificates was halted in 1964, and they were deemed no longer redeemable in silver from 1968 onwards.
