- History Physical tokens
- Legal
- See also
- References
{{about|the monetary concept|physical coins that are not legal tender|token coin}}{{multiple issues|{{Globalize|date=September 2010}}{{More citations needed|date=July 2007}}{{essay-like|date=February 2019}}{{undue|date=February 2019}}
}}In economics, Token money, or Token, is money that has little intrinsic value compared to its face value. Unlike fiat money, which also has little intrinsic value, it is limited legal tender.{{r|dict}} It does not have free coinage. HistoryPlato distinguished between tokens and commodities.[1]{{Clarify|date=September 2018}} In the early nineteenth century, David Ricardo suggested issuing token money as long as it did not affect commodity standard.[2] Physical tokens{{see also|token coin|voucher}}Token money has less commodity value compared to its face value.{{r|dict}} If the token money is metallic it is commonly made out of cheaper metals such as copper and nickel. Token money is also money whose face value exceeds its cost of production, i.e. the intrinsic value is lower than the extrinsic value. This means that the actual worth of a note or coin is much less than what we use it for. The cost of production of token money is less than its actual value, for example with convertible currency, collector notes, souvenirs, coupons, some retired US banknotes and per 1986 banknotes printed in regulation size and only on one side with authorization are actually worth more dollars than when issued.{{Citation needed|date=August 2018}} With token money, exchanges are not considered fully complete because the exchange of value is not equivalent.[3] Value is hoped to be rendered at some future time. Examples of this include bills of exchange or negotiable instrument and certificates.[3] Token money does not have free coinage. LegalToken money may be representative money, as well as having nominal value; that is, its owner has a legal claim to a fixed amount of a commodity that has intrinsic value.[4] See also- Bearer instrument
- Bullion
- Store of value
References1. ^{{cite book |title=Money and its Origins |last=Karimzadi |first=Shahzavar |year=2012 |publisher=Routledge |isbn=9781136239021 |page=139 |url=|accessdate=2 January 2017}}
2. ^{{cite journal |last1=Sargent |first1=Thomas |title=Commodity and Token Monies |page=2 |url=http://www.tomsargent.com/research/commodity_money.pdf}}
3. ^1 {{cite book |title=The Ecology of Money: Debt, Growth, and Sustainability |last=Kuzminski |first=Adrian |year=2013 |publisher=Lexington Books |isbn=9780739177181 |page=54 |url=https://play.google.com/store/books/details?id=VVWSAAAAQBAJ |accessdate=2 January 2017}}
4. ^{{cite web |url=https://fee.org/resources/denationalization-of-money/ |title=Denationalization of Money |author=F. A. Hayek |date=7 January 2015 |publisher=Foundation for Economic Education |accessdate=2 January 2017}}
}}{{Means of Exchange}} 1 : Money |