The difference between paper money and coins

The difference between banknotes and coins is that one is a credit currency and the other is a metal currency, banknotes rely on the national credit system to generate value, and are not of much value in themselves, coins are made of metal, and have a certain value in themselves, beyond the value of the currency itself, the nominal value is also endorsed by the national credit. Most of the national market circulation is paper money, coins are also the use of lower value of the metal as money, because it is more resistant to wear and tear and as a complement to paper money.

What is credit money

Credit money is the legal tender of a modern country, the value of the currency is backed by the credit of the country, generally the credit money issued by the country are banknotes, and then a small amount of coins made of low-value metals as a supplement to the circulation of the issue. Credit money is also the product of a national legal tender, which itself does not have much value, due to its ease of circulation and trading, easy to use, low transaction costs, eliminating the precious metal currency. Credit money does not have a certain value in itself like precious metal money, its value source is the national credit, its own value is much lower than its monetary value.