Money consisting of solid tokens, typically of metal. Coins were originally made of precious metals, usually gold or silver, and were imprinted with patterns such as the sovereign’s portrait to certify that their weight and fineness had been tested and approved. Sovereigns discovered that they could make profits by debasing the coinage, so that the material was of less value than the face value of the coin. This led to the rise of token money, which does not claim to have intrinsic value. Since the rise of paper money, coinage has been largely used as small change. In a modem economy coins form only a small part of the total money supply. While the material costs are low, the processing costs of minting low-denomination coins mean that they may cost more to produce than their face value.
|Reference: Oxford Press Dictonary of Economics, 5th edt.|