At one time the promise was that a £ note could be swapped for a certain amount of precious metal. No longer though.
I don’t particularly like “ism” s but we can have either “metallism” or “chartalism”. The theory of metallism defines money as a commodity with intrinsic value that makes it widely accepted as a medium of exchange usually in terms of precious metals such as gold.
The term “chartalism” comes from the Latin word charta, which means ticket or token – items that may be accepted as payment, but which do not have intrinsic value. Thus money is a unit of account with value that is determined by what the government will accept as payment for tax obligations. In other words, chartalism states that money does not have intrinsic value, but is given value by the government.
Up until the early 1970’s most countries were on a gold standard, even if only indirectly, due to having a fixed exchange rate to the US$. The removal of the link between gold and the US$ and, at almost the same time, the removal of fixed exchange rates meant that the currency regime moved away from being metal based to being token based. That change wasn’t at all recognised to the extent it should have been.
That’s all a £ (or a $ or a €) is now. Its just a token. A government IOU. Governments can make as many tokens as they like. They can never run out. If they issue too many we get inflation. Too few then recession. On a £10 note is written “I promise to pay the bearer on demand”. It has got a nice picture of the Queen on it. So what does she promise? She promises to give you another one. That’s all she promises. She might give you two fives for a ten, or a bag full of coins but there’s no gold and no silver.
There’s Ron Paul running around the USA making the case for a return to the Gold Standard but there’s no-one in Europe , or anywhere else, at least as far as I know. So, whether we like it or not we are all chartalists now!