What Makes it a Coin Instead of a Round?

Many coin collectors only collect coins. Rounds and bars are simply not acceptable to them. So what makes a round or bar shaped piece of metal a legitimate coin?

Generally, coins are legal tender made by, or on behalf of, a legitimate nation, and bear a denomination of that government's currency that is legal tender. Anyone can make a round, but only a nation can authorize the production of a coin. This would seem to imply that if the piece of metal has a country's name on it, and is stamped with a denomination of that country's currency, it must be a coin. Unfortunately, it is much more complex than that.

Collector coins are important to many small countries' economies. Coins are produced for many small nations by major mints. The Perth Mint makes coins for Tuvalu and the Cook Islands. The New Zealand makes coins for a myriad of small nations, including some for the Cook Islands. These are collector coins, often colorized, housed in cases, and accompanied by certificates of authenticity. A multitude of coins are made for each such nation, and mintages are often low to insure a high demand. This translates into high prices. Remember, the mint also makes money from these coins.

But then there are places like Palau. Palau is actually a United States possession, but has the economic need to sell collector coins. So, Palau has issued a series of metallic disks that actually have a denominations stamped on them. Unfortunately, Palau uses the currency of the United States, and has no authority to issue money of its own. So, technically Palau "coins" are really just rounds. They can be minted in precious metal, colorized as many small nations' coins are, and be housed in display cases. They can even be accompanied by certificates of authenticity. But, while they are authorized by a nation, bear a denomination, and appear to be coins, they are not. Palau is not the only small entity making coin-like rounds. Others are also capitalizing on this source of income.

Now consider the Hutt River Providence of Australia. This micro-nation actually declared its independence from Australia, operates its own mint, and makes legitimate currency. Some coins are intended to be collector coins, but unlike the case with Palau, these are real coins.

So, if it is a small nation, has its name on a piece of metal, and uses a denomination, the nation may have authorized a legitimate coin, but not necessarily. Coin collectors who collect coins from small nations of the world must do research before accepting something that looks like a coin as an actual coin, or decide it really does not matter to them.

Henry M. Smith provides information or coins and inks to some major mints, and sells coins through Black Spaniel Gallery. The website is http://blackspanielgallery.com for both coins and information.