Re: Why are coins made of metal?

Coins are made of metal partly for historical reasons (that's what they've always been made of!) But the ancients had good reasons for making their coins of metal.

1. Metals are valuable. Typically coins of higher value are made of metal of higher value.
2. Metals are durable. Unlike stone, they won't shatter; unlike wood, they don't burn easily and are hard to break.
3. Metals are easy and cheap to form and stamp. They can be melted and recast; they can be stamped with the king's (or queen's) head and anything else you care to put on them. In this way, it becomes easier to distinguish real currency from counterfeits.

But paper money, which like stone and wood has little or no intrinsic value, can only function in a stable economy, while coins (made of metal which is valuable in itself) can function in any economy. Nobody buries bags full of paper money in the back yard, but people have done that with coins throughout history. (A numismatist friend of mine tells me that this is why coins from certain politically unstable periods are relatively common.)

Nowadays, some metals are so cheap that they function like paper, and Germany (for example) makes 1- and 5-mark coins from aluminum, which has little intrinsic value. For that matter, US and Canadian dollar coins are stamped from metal which is worth 1/5 or less of their face value. But coins are still made of metal because metal is easy to work and durable; more so than plastic, the alternative which springs to mind.

And metal has another value these days: coin-operated vending machines need metal coins so they can tell real coins from counterfeits by the detailed electromagnetic properties of the coin. If you read about how the new US dollar was designed, you will find that this was a major constraint.

Dan Berger