What Is Coin Currency?

What Is Coin Currency?

Coin currency is money made of metal and usually in the shape of a disc with a hole in the center. It has intrinsic value, which derives from its material composition. It also has extrinsic value, which is determined by the authority that issues it, such as a government or a bank. Coins can be made of a variety of materials, including gold, silver, copper and nickel. They can have different shapes and are often stamped with a design or denomination.

The COVID-19 pandemic disrupted how coins make their way to banks, retailers and wallets. Dimes gathered dust on dressers and quarters languished in drawers instead of dropping into change sorters in bank lobbies and washing machine coin slides at laundromats. But Federal Reserve banks and commercial banks think about how to move coins through the economy all the time, as the chairs of both financial regulatory bodies recently noted.

While it is difficult to know exactly how many coins are in circulation, we do know that there were enough before the pandemic to cover all transactions in the United States as of April. Since then, coin has been moving more slowly through the economy. As the Federal Reserve Board explains in a Frequently Asked Questions page, this slow-down has reduced available inventories of coin.

The obverse side of a coin features the date, mint mark and main design. The reverse side of a coin shows a profile of the head of a person or animal, and is often inscribed with an inscription such as “Liberty,” “In God We Trust,” or “United States of America.”

A coin’s shape can determine its value. Round coins are the norm, but other shapes are used for some types of coins. Some are square, such as the 50-cent coins of Hong Kong and Aruba. Others are polygonal or have wavy edges, such as the Australian and Swazi 50-cent coins.

As a collector’s item, the value of a coin depends on its condition and specific historical significance, among other things. The price of a coin also is dependent on its scarcity, which can be caused by factors like the number and size of available examples and a coin’s history of counterfeiting or clipping.

Coins have a special place in the American numismatic community because of the history they contain. Decisions about a coin’s content, design and price were often driven by political or economic events that happened at the time it was minted, and learning about these details can make old coins come alive. For example, many people collect the unofficial mill coins that were produced by state, local and private businesses for tax payments or to render small purchases. These unofficial coins were often crafted of diverse materials, such as wood, tin, plastic and other substances. They may not have been as beautiful or valuable as official coins, but they still are fascinating to learn about.