Fungible token and the mint
Strike coins of a weight, fineness and size fixed in law, at one mint working under seal, and prove every year, in public, that they meet the standard.
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Why this matters
A coin is a standard weight of metal that someone guarantees, so it can change hands by count instead of on the balance. The guarantee is worth only as much as the check behind it. England has tested its coins in public since at least 1248: at the annual Trial of the Pyx, coins drawn at random from every batch are weighed, measured and assayed by a jury of goldsmiths against the national trial plates and standard weights (Goldsmiths' Company).
The failure mode is debasement by the issuer itself. Between 1544 and 1551 the English crown cut the silver in its coins and struck copper with a thin silver skin to pay for war (Royal Mint); one of its trial plates was below 800 parts in 1,000 of silver against the sterling 925 (Royal Mint Museum).
The shape of it
- Write the standard into law: each coin's metal, fineness, weight and size, and the tolerance on each.
- Make trial plates and standard weights, and hold them outside the mint.
- Strike at one mint under seal: dies counted and locked away, every melt assayed, every blank weighed.
- Give the coin a milled or lettered edge and a design hard to copy, so clipping and forgery show.
- Set aside coins at random from every batch, sealed, for an independent public trial every year.
- Change the standard only by a published law, never by the mint or the treasury on its own.
- Withdraw worn, clipped and forged coin through the banks and the treasury, and replace it.
Doing it, step by step
The summary above says what has to happen. This says how, with the numbers that decide whether it works.
1 · Write the standard into law
The law, not the mint, says what a coin is. For each denomination it fixes:
- the metal and its fineness, in parts per thousand of the precious metal;
- the weight;
- the diameter and thickness;
- the tolerance on each.
Publish it in the written law, so anyone with a balance can check a coin against it.
2 · Hold the standard outside the mint
Make two reference sets and keep them away from the people they check:
- Trial plates, ingots of exactly the legal fineness, against which coin metal is assayed side by side.
- Standard coin weights, checked against the national mass standard.
In Britain these are held by the national measurement office, not by the Royal Mint, and brought out for the trial (Goldsmiths' Company).
3 · Strike under seal
One mint, one set of controls:
- Dies are numbered, issued against a signature each shift, and locked away or destroyed when worn.
- Every melt is assayed for fineness before it is rolled and cut.
- Every blank is weighed, or sampled by weight, before striking.
- Metal in and coin out are balanced in a double-entry ledger, so the mint can account for every gram.
4 · Make the edge and the face hard to cheat
A plain-edged coin can be clipped — metal shaved off the rim — without showing. England's hammered silver was so clipped and worn by the 1690s that the whole coinage was melted and restruck in 1696–1699, as machine-struck coins with milled edges, which make coins uniform and hard to counterfeit; the work produced £6.8 million in silver coin at London and five provincial mints (Newton and the Mint, Oxford).
Forgery is the modern version. In 2014 the Treasury found that one in every thirty British £1 coins was counterfeit, and replaced the coin with a twelve-sided one of two metals, a nickel-brass ring round a nickel-plated centre, with features hard to copy (HM Treasury).
5 · Test in public, at random, every year
The Trial of the Pyx is the working model (Goldsmiths' Company):
- Throughout the year, coins are taken at random from every batch of each denomination, sealed in bags of 50, and locked in the pyx boxes.
- Once a year a jury of goldsmiths, not mint staff, tests them for metal content, weight and size against the trial plates and standard weights.
- A judge presides, and the verdict is published.
The rule that matters is that the people who strike the coin never choose the samples or judge them.
6 · Never debase
Debasement is a hidden tax. In the Great Debasement of 1544–1551 the crown struck more coins from the same silver by mixing in base metal, and issued copper coins with a thin silver coat that wore through on the king's nose (Royal Mint). Trust in the coin was restored only by a recoinage early in Elizabeth I's reign, which she marked by visiting the Mint in July 1561 (Royal Mint Museum).
The rule against it: the standard changes only by a published law, and the yearly trial would show any coin struck below it.
7 · Withdraw what is worn, clipped or false
Coin wears in use, and forgeries accumulate. Charge the treasury and the banks with taking in coin that is worn below its tolerance, clipped or forged, and with replacing it.
- Pay full face value for genuine worn coin, so holders bring it in.
- Cut forgeries in half and record where they were found.
- Publish how much was withdrawn each year.