Trade coin

Trade coins are coins minted by a government, but not necessarily legal tender within the territory of the issuing country. These quasi-bullion coins (in rarer cases small change) were thus actually export goods – that is, bullion in the form of coins, used for the bulk purchase of important goods from other countries, where they could be bought at a favourable price, compared to the purchasing power of the same amount of bullion within the trade coins' country of origin.

A distinction must be drawn between full-value bullion trade coins, that were used in ordinary peacetime trade on the one hand, and on the other hand debased coins, that were usually made with the intention to deceive. Such debased "trade coins" were occasionally minted during times of war, e.g. the Prussian ephraimiten, silver-clad copper coins minted during the Seven Years' War. If these were ever accepted or approved as legal tender, they would be valued far below the regular coins, their value being calculated according to a specified formula. The conversion rates were even then usually significantly below the intrinsic value of the coins, to cover costs of melting and recoinage etc.

Since the 1920s there have been hardly any true trade coins, though some are still traded by coin collectors with a premium. Their role has now been taken over by (paper or electronic) United States dollars as, in some ways, a world currency.