Currency money is money in full circulation that takes its value from the precious metal it contains, that is, its market value is (almost) the value of the metal it contains (apart from the
Seigniorage
Seigniorage , also spelled seignorage or seigneurage (), is the increase in the value of money due to money creation minus the cost of producing the additional money. Monetary seigniorage is where government bonds are exchanged for newly create ...
or the minters' profit), though this is always overcompensated for in coins and banknotes from a country undergoing
debasement
A debasement of coinage is the practice of lowering the intrinsic value of coins, especially when used in connection with commodity money, such as gold or silver coins, while continuing to circulate it at face value. A coin is said to be debased ...
. Currency money is usually made of silver or gold, but in very rare cases plated metal and even copper may be used. Currency or face value coins are a type of
commodity money
Commodity money is money whose value comes from a commodity of which it is made. Commodity money consists of objects having value or use in themselves ( intrinsic value) as well as their value in buying goods.
This is in contrast to representa ...
, money whose value is derived from the what it is or what it is made of (e.g. shell, cigarettes, tea or a certain metal) as opposed to coins whose metal value is less than their nominal value, paper money, and deposit or book money, which are
fiat money
Fiat money is a type of government-issued currency that is not backed by a precious metal, such as gold or silver, nor by any other tangible asset or commodity. Fiat currency is typically designated by the issuing government to be legal tende ...
.
Currency
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