The Theory of Everything : Coinage

By Stuti Mishra|Updated : October 1st, 2020

Coins are considered as legal tender. They are pieces of metal that have been assigned a value and stamped with a designed approved by the governing authority of the region/ nation/ world. They are usually acceptable as a medium of exchange. 

Coins have evolved over time. From barter system to Indian rupees, medium of exchange has changed from time to time. We have come up with the history of coins in India.

Introduction to Barter System

17

  • Barter system was the method used centuries ago, even now also but in advanced form.
  • In this method goods & services were exchanged by the people to one another according to their needs. Goods include crops, cattle (sheep, camel, cows), services etc.
  • Barter system was introduced centuries back around 6000 BC by the people of Mesopotamia.
  • The major problem arised during that time period was the “Double coincidence of wants” & value of goods. It was difficult to search the person with the same need of goods which the other person was holding.
  • For Example: - if a person having rice but wants chicken then he was supposed to search the person who wants rice & can give him chicken in exchange.
  • Another problem was People those who were rich exchanged goods of less value with the goods of higher value, or less in quantity.
  • This made the problem for the people who were less rich.
  • When money was introduced Barter System did not stop even it became more organized.
  • Money was introduced to replace the barter system but was failed because of no support, but later came into existence again.

History of Coins

History of coins is related to Ancient time period & with economic history. Coins were introduced for the development & means of carrying out transaction involving a physical medium of exchange.

Indus Valley Civilization (2500 BC – 1300 BC):

144

Punch-marked coins made of silver & seals of mohenjo daro

Maurya Empire (321 BC – 185 BC):

1444

Ruled by the mauryan dynasty & was headed by Chandragupta Maurya, Silver punched mark coins with the symbol of wheel & Elephant

Kushan Empire (185 BC – 220 AD):

The Kushan Empire was a syncretic empire, formed by Yuezhi. Little silver coinage was issued but later gold coin was used & was debased with silver. First gold coins were issued by the first century of the kushans.

Satavahana Empire (230 BC – 220 AD):

In this period of time coins were minted with the image of their rulers.

Gupta Empire (320 AD – 535 AD):

01

Ancient Indian Empire was founded by Maharaja Sri-Gupta & gold coins were minted during that period of time.

Middle kingdoms of India (1 AD – 1279 AD):

Copper & Silver Coins in its initial stage.

Medieval India (1206 – 1526):

The period was marked with the delhi sultanate with gold, silver & copper coins

2222

  1. Coin of Nasiru-d-din Mahmud 1246 - 1266 AD
  2. Coin of Ghiyasu-d-din Balban 1266 - 1287 AD
  3. Silver Coins during Khilji’s time period
  4. Bin tuglaq reintroduced old gold & silver coins
  5. Coins of the Vijayanagar kingdom was largely struck in gold and copper.
  6. Pagoda, East India Company inspired by the gold coins of the Vijayanagar Empir

Mughal Empire (1526 – 1857):

  1. Sher Shah issued a coin of silver which was termed the Rupiya. Together with the silver Rupiya were issued gold coins called the Mohur weighing 169 grains and copper coins called Dam. Innovations like ornamentation of the background of the die with floral scrollwork were introduced.
  2. Different mohur were introduced by humayun, Sher-shah suri, Akbar, Aurangzeb & Farrukhsiyar

Maratha Empire (1674-1818):

99999

Coins of Maratha rulers include the gold and which were issued by Shivaji. The coins of Shivaji bore 'Chhatrapati' in Nagari on one side and 'Sri Raja Siva' on the other side of the coin. The gold coins of both the kings were of 'pagoda' type. Some pagoda coins are found with the image of Lord Shiva.

British Raj (1858 – 1947):

The East India Company started a mint in Bombay and European style gold, silver, copper, and tin coins were struck. The gold coin was named Carolina, the silver coin Anglina, the copper Copperoon, and the tin coin called the Tinny.

  • The first coin was made in Iron Age & was firstly issued by the “Hermodike of Kyme”.
  • Coins began to be used in business in India, Asia Minor, and China in the 6th century BC. But most historians agree that the ancient Greeks, living in Lydia and Ionia (on the western coast of modern Turkey), issued the world's first coins in 650 BC.
  • These first coins were made of electrum, a naturally occurring pale yellow mixture of gold and silver that was further alloyed with silver and copper.
  • The earliest coins are mostly associated with Iron Age, especially with the kingdom of Lydia.
  • The first Lydian coins were made of electrum, a naturally occurring alloy of silver and gold that was further alloyed with added silver and copper.
  • Early electrum coins were not standardized in weight and in their earliest stage may have been ritual objects, such as badges or medals, issued by priests.
  • Many early Lydian and Greek coins were minted under the authority of private individuals.
  • Most of the early Lydian coins include no writing, only an image of a symbolic animal. Therefore, the dating of these coins relies primarily on archaeological evidence, with the most commonly cited evidence coming from excavations at the Temple of Artemis at Ephesus and also called the Ephesian Artemision.
  • Because the oldest lion head "coins" were discovered in that temple, and they do not appear to have been used in commerce, these objects may not have been coins but badges or medals issued by the priests of that temple.
  • Anatolian Artemis was the "Mistress of Animals"), whose symbol was the stag.

Globally:

All western histories of coins begin invention at some time slightly before or after 700 BC, in Aegina Island or according to others in Ephesus,Lydia,650 BC. Ancient India in circa 6th century BC, was one of the earliest issuers of coins in the world. The coin was larger and made of pure copper, while today’s smaller coin is made of copper and zinc. It was one of the first coins made by the United States Mint after it was created in 1792. In 1857, congress authorized the united states Mint to strike the penny with 88% copper and 12% nickel.

  1. Some of the most famous and widely collected coins of antiquity are Roman coins and Greek coins.
  2. Some of the earliest coins were beaten at the edges to imitate the shape of a cow, in indication of their value.
  3. Most coins are circular but some were rectangular. Also a lot of coins, especially in China had a hole through the centre so they could be tied on to a string.
  4. Some of the earliest coins to be made purely from silver and gold were the silver Dirham and gold Dinar in the early Islamic Caliphate from the 7th century.
  5. Silver and gold coins are the most common and universally recognized throughout history, even today. Mints around the world still make millions of gold and silver coins, including the Canadian Silver Maple Leaf, the American Gold Eagle, and the Australian Nugget. Copper, nickel, and other metals are also common, but in lower denominations.

dgwerhyrth
Important Facts:

  • First coin in the world: The coin was larger and made of pure copper, while today's smaller coin is made of copper and zinc. It was one of the first coins made by the United States Mint after it was created in 1792. In 1857, Congress authorized the United States Mint to strike the penny with 88% copper and 12% nickel.
  • Gold Coins introduced in India: Earliest Kushan coinage is generally attributed to Vima Kadphises. The Kushan coins generally depicted iconographic forms drawn from Greek, Mesopotamian, Zorastrian and Indian mythology. Siva, Buddha and Kartikeya were the major Indian deities portrayed.

Independence (1947–present)

1201

 Current Status of Coins in India

  1. The coins which are currently in circulation are: 1, 2, 5 and 10 rupee coins.
  2. Only the Government of India has the right to mint coins.
  3. According to the Coinage Act, 1906 only the Government of India has the responsibility of coinage.
  4. The Government of India is solely responsible for designing and minting of coins in various denominations.
  5. Coins are minted at four places -Mumbai, Alipore (Kolkata), Saifabad (Hyderabad), Cherlapally (Hyderabad) and Noida (UP).
  6. The coins are issued for circulation only through the Reserve Bank in terms of the RBI Act.

Types of coins:

I. On the basis of coinage:  coinage is the process of converting metal into a coin. On the basis of coinage money has been classified into:

  1. i) Free Coinage: If a person is free to go to mint and get his metal converted into the coin, the system is known as free coinage. It is worth mentioning that the shape, size, design, weight and the purity of metal is decided by the government. Free coinage is further sub classified into:
  2. a) Gratuitious Coinage: If no charges are taken by the mint on converting metal into a coin the system is known as Gratuitous Coinage.
  3. b) Brassage Mintage: If actual charges of conversion are charged the system is knownas Brassage Mintage.
  4. c) Seigneorage: If some profit is charged by the mint on conversion of metal into a coin, the system is known as Seigneorage.
  5. ii) Restricted Coinage: If the coins are minted by and for the government only, the system is known as Restricted Coinage. In this system, the public has no right to get their metal converted into a coin.

II. On the basis of legality:  On the basis of legality money can be classified into:

  1. a) Legal tender money: If the currency which is in circulation in the economy is enforceable by law, it is known as Legal Tender Money. By this, we mean that a person cannot refuse to accept this currency in exchange of commodities and if he refuses, he can be prosecuted under law.

Legal tender money can further be classified into:

  • Limited legal tender money: It is that money which a person is bound to accept up to a limit. In India, the coins of 1, 2, 5, 10, 20, 25 & 50 paisa are the examples of Limited Legal Tender Money.
  • Unlimited legal tender money: It is that money which a person cannot refuse to accept irrespective of the amount of payment. The examples are: Rs 1 coin, Rs 1, 2, 5, 10, 20, 50, 100, 500 & 1000 notes.

Classification of Coins:

Coins are classified into two types. They are-1).Principal coin and 2).Token coin.

  • PRINCIPAL COIN
  1. It is bigger in size.
  2. It is unlimited legal tender money.
  3. It’s face value is equal to its intrinsic value.
  4. There is free coinage of principal coin.
  5. It is also known as the Standard Coin.
  • TOKEN COIN
  1. It is the limited legal tender money.
  2. It’s coinage is restricted.
  3. It’s metallic value is less than the face value.
  4. It is subsidiary of Principal coin.
  5. It is also known as the Subsidiary Coin.

Is Indian Rupee a Standard Coin or Token Coin?

On the perusal of the above characteristics it can be said that the Indian Rupee has only two characteristics of a principal coin:

  1. It is the principal coin i.e. main coin.
  2. It is unlimited legal tender money.

But it does not have free coinage and its metallic value and face value are not equal. Therefore, some economists refer the Indian coin as standard token coin.

Coins from Athens and Corinth appeared shortly thereafter, known to exist at least since the late 6th century BCE

THE INDIAN COINAGE ACT, 1906

An Act to consolidate and amend the law relating to Coinage and
the Mint. It describes the Power to establish and abolish Mints - The Central Government may, by notification in the Official Gazette.

222

Also describes about:

  • Decimal system of coinage:
  • Power to call in coin:
  • Power to certain persons to cut diminished or defaced silver coins:
  • Procedure in regard to coin cut under Section 16(a) & 16(b)
  • Power to make rules
  • Savings of making other coins
  • Temporary provisions with respect to certain Hyderabad coins

Coinage Act, 2011

An Act to consolidate the laws relating to coinage and the Mints, the protection of coinage and to provide for the prohibition of melting or destruction of coins and prohibit the making or the possession thereof for issue and for matters connected therewith or incidental thereto.

  • Decimal system of coinage
  • Power to call in coin
  • Power to certain persons to cut, diminished or defaced coins
  • Power of mint to delegate its functions
  • Prohibition of making or melting or destruction of coins
  • Prohibition & penalty for bringing metal piece for use as a coin
  • Continuance of existing coins

In India RBI has unfold the minted places

Coins are minted at the four India Government Mints at Mumbai, Alipore(Kolkata), Saifabad(Hyderabad), Cherlapally (Hyderabad) and NOIDA (UP). The coins are issued for circulation only through the Reserve Bank in terms of the RBI Act.

Now to help you out in your preparation and to save you from multiple purchases of online courses, We have launched Gradeup Super Subscription, which gives you 

Unlimited Access to All 15+ Structured Live courses and 420+  Mock tests. 

Try Gradeup Super Now and get unlimited access to all 20+ Structured Live Courses and 500+ Mock Tests

byjusexamprep

So why wait? Subscribe to Gradeup Super now and #GetSuperReady for your exam. 

Update your app by Clicking Here

All the best!

Prep Smart. Score Better. Go Gradeup.

Comments

write a comment

PO, Clerk, SO, Insurance

BankingIBPS POIBPS ClerkSBI POIBPS SOSBI ClerkRBIIDBI SOIBPS RRBLIC

Follow us for latest updates