How would you define a currency board?

Question

Quizplus · Accepted Answer

A currency board is a monetary system in which the monetary base is backed entirely by foreign currency reserves and the central bank holds no domestic assets. This means that the currency board establishes a fixed exchange rate between its domestic currency and a foreign currency, typically the US dollar or the euro, and is required to maintain a strict convertibility between the domestic currency and the foreign currency at this fixed rate. The currency board operates as a strict constraint on the monetary policy of the country, as it cannot issue more domestic currency than the amount of foreign currency in its reserves.

How Would You Define a Currency Board