is a piece of hard material, usuallymetalor a metallic material, usually in the shape of adisc, and most often issued by a government. Coins are used as a form of moneyintransactions of various kinds, from the everyday circulation coins to the storage of vastnumbers of bullion coins. In the present day, coins and banknotesmake up the cash forms of all modern money systems. Coins made for circulation (generalmonetizeduse) are usuallyused for lower-valued units, and banknotes for the higher values; also, in most moneysystems, the highest value coin made for circulation is worth less than the lowest-value note.The face value of circulation coins is usually higher than the gross value of the metal used inmaking them, but this is not generally the case with historical circulation coins made of precious metals. For example, the historicalEaglecontained .48375troy ounceof gold andhas a face value of only ten U.S. dollars, but the market value of the coin, due to its metalcontent, is now many times the face amount.Exceptions to the rule of coin face-value being higher than content value, also occur for some" bullion coins" made of silver or gold (and, rarely, other metals, such as platinumor palladium), intended for collectors or investors in precious metals. For examples of moderngold collector/investor coins, the United States mints theAmerican Gold Eagle,CanadamintstheCanadian Gold Maple Leaf , andSouth Africamints theKrugerrand. TheAmerican GoldEaglehas a face value of US$50, and theCanadian Gold Maple Leaf coins also have nominal(purely symbolic) face values (e.g., C$50 for 1 oz.); but theKrugerranddoes not.Historically, a great number of coinage metals(including alloys) and other materials have been used practically, impractically artistically, and experimentally in the production of coinsfor circulation, collection, and metal investment, where bullion coinsoften serve as moreconvenient stores of assured metal quantity and purity than other bullion.
Coins have long been linked to the concept of money, as reflected by the fact that in other languages the words "coin" and "currency" are synonymous. Fictional currencies may also bear the name coin (as such, an item may be said to be worth 123 coin or 123 coins).
A selection of modern coins.In terms of its value as a collector's item, a coin is generally made more or less valuable by itscondition, specific historical significance, rarity, quality/beauty of the design and general popularity with collectors. If a coin is greatly lacking in any of these, it is unlikely to beworth much. Bullion coins are also valued based on these factors, but are largely valued based on the value of the gold or silver in them. Sometimes non-monetized bullion coinssuchas theCanadian Maple Leaf and theAmerican Gold Eagleare minted with nominal facevalues less than the value of the metal in them, but as such coins are never intended for circulation, these value numbers are not market nor fiat values, and are never more thansymbolic numbers.Most coins presently are made of a base metal, and their value comes from their status asfiatmoney. This means that the value of the coin is decreed by government fiat (law), and thus isdetermined by thefree marketonly as national currencies are subjected toarbitrageininternational trade. This causes such coins to be monetarytokensin the same sense that paper currency is, when the paper currency is not backed directly by metal, but rather by agovernment guarantee of international exchange of goods or services. Some have suggestedthat such coins not be considered to be "true coins" (see below). However, becausefiatmoneyis backed by government guarantee of a certain amount of goods and services, wherethe value of this is in turn determined byfree marketcurrency exchange rates, similar to thecase for the international market exchange values which determines the value of metalswhich back commodity money,in practice there is very little economic difference betweenthe two types of money (types of currencies).Coins may be minted that have fiat values lower than the value of their component metals, but this is never done intentionally and initially for circulation coins, and happens only in duecourse later in the history of coin production due toinflation, as market values for the metalovertake the fiat declared face value of the coin. Examples of this phenomenon include the pre-1965 US dime, quarter, half dollar, and dollar ,US nickel,and pre-1982 US penny. As aresult of the increase in the value of copper, the United States greatly reduced the amount of copper in each penny. Since mid-1982, United States pennies are made of 97.5% zinc coatedwith 2.5% copper. Extreme differences between fiat values and metal values of coins causescoins to be removed from circulation by illicit smelters interested in the value of their metalcontent. In fact, theUnited States Mint, in anticipation of this practice, implemented newinterim rules on December 14, 2006, subject to public comment for 30 days, whichcriminalize the melting and export of pennies and nickels.
Violators can be punished with afine of up to $10,000 and/or imprisoned for a maximum of five years.To distinguish between these two types of coins, as well as from other forms of tokens whichhave been used as money, some monetary scholars have attempted to define three criteria thatan object must meet to be a "true coin".