What Is Coin Currency?

What Is Coin Currency?

Coin currency is a form of money, used in both domestic and international trade. The value of a coin is usually determined by its weight and metallic content, but it can also be based on the symbolism or history of the coin. Modern coins are typically made of a base metal, such as copper or nickel, and are considered fiat money, not backed by precious metals or other assets. As a result, their value is set by law rather than the free market.

Coins have been created since ancient times, as a form of payment and a token of wealth. They are still produced in many countries around the world, in a variety of shapes and sizes, as well as using various metals. Despite the popularity of electronic payments, coinage is still important in some countries, particularly for small purchases or for those that lack an electronic payment system.

The side of a coin carrying an image of a monarch, other authority (see List of people on coins) or national emblem is called the obverse; the reverse, displaying different types of information, is known as the reverse. The obverse and reverse are stamped or imprinted with a design using a process called striking. The strength of the strike — full, average or weak — affects the coin’s grade and collectability.

Many of the older coins are made of a higher precious metal content than is currently used in most modern currency, because they were designed to hold their value over time. Throughout history, monarchs and governments have often increased the coinage supply by replacing a fraction of the precious metal with a lower-value metal to reduce its intrinsic value (debasement). This has been done for a number of reasons, including making the coins physically harder or more durable, and to profit from the difference in face value and metal value.

In the United States, coins are minted in denominations of one cent, five cents, ten cents, dime, quarter and dollar. Some circulating coins formerly had a higher value, such as the gold dollar or three-dollar piece, but these are now collectors’ items rather than general currency.

Most of the United States’ coinage is made at the Philadelphia Mint, with the exception of the cent and half-dollar, which were minted in a 40% silver-clad composition from 1965 to 1970. A very few of the earlier bronze cents and some silver-clad half dollars are still in circulation, as are a limited number of commemorative coins.

Counting with coins is a great way to practice addition and subtraction skills, as well as recognizing the values of various denominations. It is a good idea to start with the coins of highest value, and work down to the pennies. It is possible to exchange the larger denominations of coins for paper money at most banks, though some charge a fee. Some credit unions and banks also offer coin exchange services, though they may only be available to members.