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Fiat Gold coins are an example of legal tender that are traded for their intrinsic worth, instead of their stated value. Fiat cash or fiat currency is money whose value is not stemmed from any intrinsic value or guarantee that it can be converted into a valuable commodity (such as gold).

Generally, the federal government states the fiat currency (normally notes and coins from a main bank, such as the Federal Reserve System in the U.S.) to be legal tender, making it unlawful not to accept the fiat currency as a way of repayment for all financial obligations, public and private.  Keep Checking Back Here  as the Australian Gold Nugget and American Eagle are legal tender, nevertheless, they trade based upon the market rate of the metal content as a product, rather than their legal tender face value (which is typically only a small fraction of their bullion worth).

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However, fiat money has an advantage over representative or commodity cash, because the same laws that developed the money can also define guidelines for its replacement in case of damage or destruction. For example, the U.S. federal government will replace mutilated Federal Reserve Notes (U.S. fiat money) if at least half of the physical note can be rebuilded, or if it can be otherwise shown to have been destroyed.

Coinage These elements resulted in the shift of the store of value being the metal itself: at very first silver, then both silver and gold, and at one point there was bronze also. Now we have copper coins and other non-precious metals as coins. Metals were mined, weighed, and marked into coins.

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Coins could be counterfeited, but they also created a brand-new system of account, which helped cause banking. Archimedes' principle provided the next link: coins could now be quickly checked for their fine weight of the metal, and thus the value of a coin might be figured out, even if it had been shaved, debased or otherwise tampered with (see Numismatics).

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Gold coins were utilized for large purchases, payment of the military, and support of state activities. Silver coins were utilized for midsized transactions, and as an unit of represent taxes, charges, agreements, and fealty, while copper coins represented the coinage of typical deal. This system had been used in ancient India since the time of the Mahajanapadas.