In this method, gold was replaced by the US Dollar $.
All the currencies were fixed in terms of US $.
then they could ben compared against each other
1 Pound = $2
1 Rupee =0.1$
1 Pound = 2/0.1 =2*10/1=20 Rupees
This system gave birth to the International Monetary Fund (IMF) as the Centre institution for International Monetary System.