Till World War I it was always allegedly feasible to go to the central bank and ask for gold or silver in the place of your bank notes. Of course, this very infrequently occurred in serious amounts and many countrywide banks stopped keeping enough gold to cover. On occasion, however, such as in Germany after World War I, there would be a tragic run on the banks, leading to crazy inflation and the downfall of the nation’s economy. To stop an identical disaster happening in a vulnerable nation again, the Bretton Woods agreement was drawn up in 1944. Round the same time, the global monetary Fund and World Bank were made to assist in maintaining international industrial stability.
This held until the early 1970s. However, states were developing at different rates and in different directions, and in 1971 President Nixon suspended the gold standard. All of a sudden it was feasible to trade in currencies, and the fiscal establishments were fast to recognize the potential. Banks had to exchange money to supply their clients with foreign currencies for travel and importing goods, but pretty shortly they were exchanging far more than they wanted to profit from the continual rise and fall in the values of the different currencies. The development of the web meant that the market became accessible to anyone, in principle. To accommodate the gigantic numbers of potential new clients and because their costs were dropping, brokers began reducing the minimum investment amount. At about that point in forex history, daily trading turnover has reached between $3 and $4 trillion, more than the trading volume of all the world’s stock and bonds markets added together.