coin is usually a piece of hard material, generally metal and
usually in the shape of a disc, which is issued by a government to be used as
a form of money. Along with banknotes, coins make up the cash forms of all modern
money systems. Coins are usually used for lower-valued units, and banknotes are
usually used for the higher values; also, in most money systems, the highest value
coin is worth less than the lowest-value note.
value of a coin
The market exchange value of a coin comes from its
historic value, and/or the intrinsic value of the component metal (for example
gold or silver).
in modern times, most coins are made of a base metal and their value comes strictly
from their status as fiat money. This means that the value of the coin is decreed
by government fiat rather than agreed by the people, which really makes it less
a coin and more a token in the strictest sense. To
distinguish between these two types of coins, as well as from other forms of tokens
which have been used as money, monetary scholars have defined three criteria that
an object must meet to be a "true coin". These criteria are: It
must be made of a valuable material, and trade for close to the market value of
that material. It must be of a standardized weight and purity. It must be marked
to identify the authority that guarantees the content. By the above definition,
the invention and first known usage of coins comes from the Kingdom of Lydia circa
643-630 B.C. Under three generations of Lydian kings, the money of Lydia gradually
moved from being lumps of electrum (a naturally occurring alloy of silver and
gold) to coins of a guaranteed weight and purity, marked with the seal of the
King. True coins also developed very close to this time frame in both India and
China. The history
of coins is a long and interesting one. For example, in 1979 and 1980 a Chinese
architectural team excavating the region surrounding the ancient kingdom of Loulan
discovered some Mesolithic stone tools and coins.
Throughout history, governments have been known to create
more coinage than their supply of precious metals would allow. By replacing some
fraction of a coin's precious metal content with a base metal (often copper or
nickel), the intrinsic value of each individual coin was reduced (thereby "debasing"
their money), allowing the coining authority to produce more coins than would
otherwise be possible. Debasement of money almost always leads to price inflation
unless price controls are also instituted by the governing authority. Some consider
a classic example of this phenomenon to be the behavior of price levels in the
United States since 1964 (the last year circulating United States Coins were minted
of 90 percent silver). It should be remembered, however, that for most of the
era of U.S. silver coinage, such coins were actually fiat money, because the value
of silver was relatively low. For example, in 1960, the silver in a dime was worth
less than four cents. It also should not be inferred that such debasement and
inflation were unique to the U.S. Virtually every other country debased their
coinage too. The United Kingdom saw similar inflation during the same era. What
is unique to the United States, among the developed countries, is that the U.S.
has never revised its coinage system to accommodate this inflation, and as a result,
coins in America today are scarcely regarded as "money" in any practical
sense. Increasingly common are coin counting machines which charge money to consumers
for converting their "coins" into "cash".
of modern coinage
The milled edges still found on many coins were
originally designed to show that none of the valuable metal had been shaved off
the coin. Prior to the use of milled edges, circulating coins suffered from "shaving,"
a common problem where unscrupulous persons would shave a small amount of precious
metal from the edge of a circulating coin. This is the reason some modern coins
have ridges, known as "reeds," on their edges; the presence of reeding
shows that the coin's edge has not been shaved. Circulating unmilled British sterling
silver coins were known to be shaved to almost half of their minted weight. This
form of debasement in Tudor England led to the formulation of Gresham's Law. The
monarch would have to periodically recall, paying only bullion value of the silver,
and re-mint circulating coins. Traditionally
the side of a coin carrying a bust of a monarch or other authority, or a national
emblem, is called the obverse, or colloquially heads. The back side is called
the reverse, or colloquially tails. However, the rule is violated in some cases.
 Another rule is that the side carrying the year of minting is the obverse,
although most Canadian coins are an exception. The
orientation of the obverse with respect to the reverse differs between countries.
Some coins have coin orientation, where the coin must be flipped vertically to
see the other side; other coins, such as British coins, have medallic orientation,
where the coin must be flipped horizontally to see the other side.
that are not round (British 50 pence for example) usually have an odd
number of sides, with the edges rounded off. This is so that the coin has a constant
diameter, and therefore will be recognised by machines whichever way it is inserted.
If a coin had an even number of sides this will not be true. Some older such designs
remain, such as the 12-sided Australian 50 cent coin.
euro (EUR or €) is the currency of 12 European Union (EU) member states - Austria,
Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands,
Portugal, and Spain - four European microstates - Andorra, Monaco, San Marino
and the Vatican City - Montenegro and Kosovo, as well as various EU institutions.Euro
coins and banknotes (see euro banknotes) came into circulation on January 1, 2002.One
euro is divided into 100 cents and there are eight different denominations. All
coins have a common front side showing how much the coin is worth, with a design
by Belgian designer Luc Luyckx. The design of the 1, 2, and 5 cent coins symbolises
Europe's place in the world as a whole. The image on the 10, 20, and 50 cent coins
shows the EU member states coming together (note that the EU members who are at
this time not part of the euro are also depicted). Finally, the 1 and 2 euro coins
depict a Europe without frontiers. All coins feature 12 stars in their design.
The year featured
in the coins can date back to 1999, when the currency was formally established
(only on French, Spanish, Belgian, Finnish and Dutch coins). These countries traditionally
put the year when the coin was minted on the coin, instead of the year in which
the coin was put into circulation. Each
country participating in the euro has its own design on the national side of the
coin. These designs vary from simply depicting the same design on all coins (e.g.
Belgium) to a different design for every coin (e.g. Italy). However, all coins
again feature 12 stars in some way or another on this side as well. In nations
that are monarchies, the national side usually features a portrait of the country's
monarch, often in a design carried over from the former currency. Non-monarchical
countries often feature more stylized graphics of things such as national monuments
or symbols. Though
they are not members of the EU, Monaco, San Marino and Vatican City (but not Andorra)
also have euro coins featuring a national side, but these only occasionally end
up in general circulation as their scarcity leads to greater interest from coin
coins from Monaco feature the royal family's coat of arms and seal and the portrait
of the late ruler, Prince Rainier III. Future coins will presumably feature the
current ruler, Prince Albert II. Those
from San Marino have various towers and public buildings from the small nation
on them as well as the national coat of arms and the Vatican coins present the
portrait of the late Pope John Paul II. Future coins will feature his successor,
Pope Benedict XVI. Having coins with the effigy of a religious leader accepted
as legal tender caused some controversy in certain countries such as France. As
for Andorra, it has secured the right to mint its own national reverse from the
EU since the country will join the EU tax evasion system in 2005. For the time
being, the authority to mint coins has been transferred from the Bishop of Urgell
to the Andorran government recently. The
coins were minted in several of the participating countries, many using blanks
produced at Birmingham Mint, Birmingham, England. A problem has arisen in differentiation
of coins made using similar blanks and minting techniques. The Turkish 1 Lira
coin resembles very much the 2 euro coin in both weight and size, and both coins
seem to be recognised and accepted by slot machines as being a 2 euro coin, which
is roughly worth 4 times more. However there are now vending machines which have
been upgraded to refuse the 1 Lira Coin.
Finland does not use the one and two cent coins
in circulation. The Netherlands have also considered decommissioning the 1 and
2 cent coins, pressured by the retail business who claim dealing with 1 and 2
cent coins costs them too much money. In May 2004, shops in Woerden have run tests
in which all cash transactions were rounded to the nearest five cent amount. Because
of the positive results of the test, retailers in the whole of The Netherlands
are permitted to round cash transactions to the nearest 5 cents since September
2004. The coins will both remain a valid method of payment. Nevertheless,
if a country decides not to mint these denominations, coins from other member
states would remain legal tender. This is the case in Finland and The Netherlands
in present times. However,
as the "foreign" monetary mass is lower than the internal, the number
of 1 and 2 cent coins would stay marginal, hencefore, not being a great concern
for most retailers. Because
Finland does not use 1 and 2 cent coins in circulation, but has still minted them,
these coins are greatly valued in collector circles. Finnish 1 and 2 cent coins
in good condition can be priced at almost one thousand times their face value.
No further changes will be made to the common side of the
coins until 2007 at the earliest. It is expected that eventually the 10 new E.U.
members will be added to the common face of the euro coins (they are out of date
since 1 May 2004). Member
states must keep their national reverse for five years. There are some exceptions,
though. If the head of state of a country dies or abdicates, coins depicting the
new one may be minted. There
are no plans to move to common reverse issues in the near future. It
has been reported in UK Coin collecting magazines that the new EU member states
will be added to the coin designs in the coming 12-18 months.
and silver commemorative issues
A legacy of old national practice
is the minting of silver and gold commemorative coins. Unlike normal issues, these
coins are not legal tender in all the eurozone, but only in the country where
the coin was issued. For instance, a €10 Finnish commemorative coin cannot be
used in the Netherlands.
Despite this, these coins are not really intended
to be used as means of payment, so it does not constitute a serious problem. It
is uncertain whether the Council of Ministers will grant them legal tender status
elsewhere outside national boundaries, as San Marino, Monaco and Vatican City
also issue these kind of coins.
The European Commission allowed the minting
of commemorative coins from late 2003. From that time any eurozone country may
issue commemorative €2 coins. Such coins are legal tender throughout the eurozone.
Greece was the
first country to issue this kind of coin. The €2 coin commemorates the 2004 Olympic
Games. See Greek euro coins for more details. Finland
issued a €2 commemorative coin, celebrating the entry of the 10 new member states
to the European Union on 1 May 2004. See Finnish euro coins for more details.
a €2 commemorative coin with the monogram of the Grand Duke. Other
countries that will issue this kind of coins include Austria, San Marino (Borghesi
– October 2004), Italy – FAO ("World Food Program") and Vatican City
(St.Peter's / Vatican Basilica).
2005, Belgium issued a joint € 2 commemorative coin, with the
pictures of the Belgian king and the Grand Duke of Luxembourg on the reverse.
issues in 2005 for European countries include Austria and Spain. Refer to these
countries' coin pages for further information.
Private agencies (e.g. International Numismatic Agency in
the United Kingdom or Europ-Mint in Switzerland) have created some fantasy euro
coins intended for sale to collectors, both for the EU countries outside the European
Monetary Union (e.g. Cyprus, Malta, Sweden) and some other European countries
(e.g. Andorra, Switzerland, Liechtenstein, Norway) and territories (e.g. Corsica,
Crete, Gibraltar, Guernsey, Jersey). None of these coins are legal tender anywhere.
euro coins all have a design unique to each coin, though there is a common theme
of famous Italian works of art from one of Italy's renowned artists. Each coin
is designed by a different designer, from the 1 cent to the 2 euro coin they are:
Eugenio Driutti, Luciana De Simoni, Ettore Lorenzo Frapiccini, Claudia Momoni,
Maria Angela Cassol, Roberto Mauri, Laura Cretara and Maria Carmela Colaneri.
All designs feature the 12 stars of the EU, the year of imprint and the overlapping
letters "RI" for Repubblica Italiana (Italian Republic). There are no
Italian euro coins dated earlier than 2002, even though they were certainly minted
earlier, as they were first distributed to the public in December 2001. The
choice of the design of the coins was left to the Italian public by means of a
TV broadcast where alternative designs were presented, letting the people vote
by calling a certain telephone number. However, the 1-euro coin was missing in
this "election", because Economy minister Carlo Azeglio Ciampi had already
decided it would sport the Vitruvian man of Leonardo da Vinci. Leonardo's work
is highly symbolical as it represents the Renaissance focus on man as the measure
of all things, and has simultaneously a round shape that fits the coin perfectly.
As minister Ciampi observed, this represents the "coin to the service of
Man", instead of Man to the service of money.
euro coins have a unique design for each denomination, with a common theme for
each of the three series of coins. The minor coins feature Austrian flowers, the
middle coins examples of architecture from Austria's capital, Vienna, and the
two major coins famous Austrians. All designs are by the hand of Josef Kaiser
and also include the 12 stars of the EU and the year of imprint.
euro coins feature only a single design for all eight coins: the portrait or effigy
of King Albert II of Belgium and his royal monogram. Also part of the design by
Jan Alfons Keustermans are the 12 stars of the EU and the year of imprint. In
2002, two Polish statisticians performed an experiment that indicated that the
Belgian â‚¬1 coin lands on heads more often than tails.
euro coins have three designs, though two of them are each found on one coin only.
The design for the minor and middle series of coins is by Heikki HÃ¤ivÃ¤oja, the
design for the 1 euro coin was done by Pertti MÃ¤kinen and the national side of
the 2 euro coin is by the hand of Raimo Heino. All designs feature the 12 stars
of the EU and the year of imprint. â‚¬
0.01 and â‚¬ 0.02 coins are not used in Finland; only few were minted, for collectors.
Sums are rounded to the nearest â‚¬ 0.05; hence sums ending in â‚¬ 0.01, â‚¬ 0.02,
â‚¬ 0.06 or â‚¬ 0.07 are rounded down, and those ending in â‚¬ 0.03, â‚¬ 0.04,
â‚¬ 0.08 or â‚¬ 0.09 are rounded up. The rounding is applied to the grand total
only, while individual prices are still shown and summed up with â‚¬ 0.01 precision.
euro coins feature three separate designs for the three series of coins.
The minor series was designed by Fabienne Courtiade, the middle one by Laurent
Jorio and the major two coins are by Joaquim Jimenez. All designs share the 12
stars of the EU and the year of imprint as well as the letters "RF"
for RÃ©publique FranÃ§aise (French Republic).