The currency literally was backed by gold in the days of the Gold Standard, but that was decades ago.
More recently, central banks held reserves of other currencies to use to manipulate the value of their own currency. (That is, if the Bank of England wanted the pound to be stronger, it could use reserves of dollars, yen etc to buy Sterling on the foreign currency markets, thus pushing the 'price' of Sterling higher.)
Nowadays, we're all more enlightened and central banks (or at least the sensible ones) no longer try to manipulate the markets this way. Instead they leave currencies to find their natural value. Because of this, we don't actually need reserves of gold or foreign currency any more. When he was chancellor, Gordon Brown sold off a large part of Britain's remaining reserves. He can be criticised for doing so when some of the assets he was selling (especially gold) were at a lower than usual price, but I don't think you can criticise him just for selling off reserves.
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More recently, central banks held reserves of other currencies to use to manipulate the value of their own currency. (That is, if the Bank of England wanted the pound to be stronger, it could use reserves of dollars, yen etc to buy Sterling on the foreign currency markets, thus pushing the 'price' of Sterling higher.)
Nowadays, we're all more enlightened and central banks (or at least the sensible ones) no longer try to manipulate the markets this way. Instead they leave currencies to find their natural value. Because of this, we don't actually need reserves of gold or foreign currency any more. When he was chancellor, Gordon Brown sold off a large part of Britain's remaining reserves. He can be criticised for doing so when some of the assets he was selling (especially gold) were at a lower than usual price, but I don't think you can criticise him just for selling off reserves.