What Is Coin Currency?
Coin currency is a form of money that is made out of metal or an alloy and usually bears a specific denomination and design. These coins, along with paper bills, are used to facilitate exchanges of goods and services in many nations, though some countries have opted for a completely digital money system. These coins are generally backed by metal, but they can also be backed by other materials or even by a government guarantee.
The value of a coin primarily depends on its condition, its rarity and popularity among collectors, and sometimes its historical significance or other numismatic factors. Most modern coins have a face value, which is often based on the precious metals they contain, although bullion coins such as the American Gold Eagle and Canadian Maple Leaf are minted with a nominal face value that is less than their actual bullion value.
Historically, some coins were minted with more valuable precious metals than others to gain greater prestige or even have a different appearance. In Tudor England, for example, coins containing silver were debased by recalling them, paying only the bullion value, and then reminting them with less precious metal. This practice, known as Gresham’s Law, was widely condemned and eventually stopped. The reminting process is called recoinage.
Most coins presently in circulation are made out of metal, such as silver or copper, that has been stamped into a shape with a die and then plated with a harder metal such as nickel or brass to make it durable enough for use. The outermost layer of a coin, the rim, is typically flattened or smoothed to prevent wear and tear. The space beneath a coin’s main design, called an exergue, is blank or may contain a privy mark or other decorative feature. Some coins have reeded or milled edges, which were originally designed to make it easier to detect clipping and other damage.
The United States mints coins, and the Federal Reserve Banks distribute and receive them through depositories (banks, savings and loans, credit unions, etc.). The Bureau of Engraving and Printing prints the notes, while the Mint makes the coins. Some countries have central banks that issue and regulate their own currencies.
For example, in the United States, the dollar is a gold-colored, silver-over-copper coin featuring the Presidential Coat of Arms on the front and Sacagawea and the bald eagle on the back. It has a face value of $1, but it actually costs more to produce than other U.S. coins of the same size, mainly because it requires more copper than other coins do. This has led some people to take up the hobby of “coin roll hunting,” which involves taking home rolls of coins from the bank and searching through them for ones that are worth more than their face values. This has become a popular pastime with thousands of enthusiasts. It’s not uncommon for rare finds to sell for much more than a dollar’s face value.