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If you are new to bullion investing or coin collecting, or even if you’ve been around for a few years, you may benefit from definitions of the many different terms used to describe products. The most notable of these are “Round” and “Coin”. To the naked eye, they look the same and have the same features, yet they are given different names. Why?
One of them is classified as legal tender and the other is not. A coin has a face value engraved on it and is classified as coinage in one or more countries. As an example, the Silver Maple Leaf coin has a face value of $5, which means it can be used just like a $5 bill. In theory at least. In practice, you will raise eyebrows if you try to spend it (even though they are likely getting more than $5 worth). Banks, of course, will accept them.
That would be a huge mistake, though, because the price of silver would have to be ridiculously low and, even at its lowest value in the last 20 years, you’d still get triple the return by selling the coin for its precious metal content.
There are strict rules applied to the minting of all legal tender and they’re exempt from certain taxes in many countries. Legal tender is produced by official mints, and backed by the government.
A round, on the other hand, has no face value, is not legal tender and is produced by a company with no connection to a government or official mint. In many cases, the round is still produced to a very high standard, but it does not have to jump through the same legal loopholes in order for it to make it onto the shelves.
There are many beautiful rounds out there, but there are also those of low quality. That’s because anyone can produce them. The same does not apply to legal tender, which goes through a longer and more tightly regulated process, so the end result is often much more desirable than a round. Mints will recruit top designers to engrave a prototype often with separate designers working on the obverse and the reverse. This will then be studied, tweaked and maybe even scrapped. When they have a full design they like, they expertly piece it together with the writing you find on the coin.
The coin is then struck in a high quality finish, often with some form of security in place, before being placed in tubes and sealed at the mint. They are then shipped worldwide.
This is also the process with some rounds, and the Sunshine Mint is a prime example of a private mint that takes a lot of time with their products. Be aware that these high specifications do not apply to all producers of rounds.
Not all private mints produce rounds, and one of the biggest in the world, the New Zealand Mint, produces a lot of legal tender. It is allowed to do this because it mints coinage for a few small Pacific nations, including Fiji. While the designs of those coins are not the sort you expect to find on legal tender in the USA, Canada or UK — including images of Elvis Presley and Star Wars — they are still classified as legal tender because they are accepted as such in a few small countries.
Other designations for coin-shaped items include medals and tokens. Medals tend to be officially minted pieces that commemorate a person or event. They are struck in many different metals and the more expensive ones possess some historic value.
Tokens also come in many different sizes and can be struck in a number of different metals. A token is something that represents something else, such as those that convert to credits in an arcade or to chips at a casino. A precious metal token is a glorified version of this, produced to celebrate, advertise or replace something else.