What happens if I take a £10 to the Bank of England?
If you look at a British £10 note, it says “I promise to pay the bearer on demand the sum of ten pounds”
Therefore, if the Bank of England is true to its word, you should be able to go to Threadneedle street and demand the value of ten pounds in Gold.
Of course, a ten pound note, has no intrinsic value. It is used to merely act as a medium of exchange. There was a time when the economy operated along the lines of a barter economy. – You give me six chickens and I’ll give you 2oz of gold. However, as economies developed it became a bit awkward to carry all these gold coins around. How do you barter six chickens for 3/4 of a horse? Therefore, some banks started to issue notes in lieu of actual gold. These notes meant that you could take it to the bank and exchange it for actual gold. Now, because people trusted these banks consumers were increasingly willing to use notes rather than money with intrinsic value. It was easier and more convenient. This is how notes and coins started to replace gold. The promise on a £10 note is a relic from the beginning of early notes, when it was necessary to explain what it meant. So in theory, the Bank should redeem its value for gold. In practise, I think, they would probably give you some technical reason why they couldn’t.
Might be worth a trip just to see what they say.