What currencies still use silver in their coins?
Will you find coins in circulation that are worth their weight in gold? Well, in this case, actually silver. The term ‘worth your weight in gold’ goes back to when the value of the coin was equal to the weight of the gold.
It makes sense but is quite a strange concept considering now we just throw coins around and lose them behind the sofa. It raises the question though, are current coins worth their weight in silver, or is the amount of silver in the coin worth 50p?
Silver Content in Coins
There was a time when coins in the UK contained 92.5% silver. This stopped around the 1920’s where the silver content dropped to 50%. As it stands in 2021, there isn’t even trace of silver to be found in any UK circulating coins manufactured by the Royal Mint.
This is fairly typical as today, coins with silver value are only made for collection (and worth a lot of money) by the Royal Mint. The history and reasons behind why our coins contain less or no silver is actually really interesting.
In the UK things started to change in 1816. For the first time ever the Royal Mint (under Parliament direction) reduced the weight of precious metals in silver coins. This was a massive deal at the time as all silver coins were ‘full-bodied’ which meant that the value of the coins was equal to the value of the silver contained in the coin. The change saw a drop of about 6% in the weight of silver.
The most interesting part of this change is that it didn’t alter the value of the coin itself. The coin was still worth the same in circulation. I.e. it could still buy you the same amount of bread and milk.
The change was smart. Up until this point there had been a shortage in coins. This is because they were mostly melted down for the value of the silver. With the coins now containing less silver, there was less of an incentive to do this.
As time went on less and less silver was used. Coins that look silver in UK circulation are no longer silver. In fact in todays ‘silver’ coins you’ll be luck to find any trace of silver.
The United States had a similar problem to the UK in that coins were dangerously low in circulation as many kept melting coins down. This got progressively worse and it wasn’t until 1853 that they did something about it. Things got so bad they had to use coin tokens!
About 35 years after the British reduced the silver content, the US followed. The UK coins dropped the weight of silver, while the Americans dropped the weight by 7%.
The price of silver rises
The whole idea of putting a precious metal into a coin, especially in such amounts, meant it was somewhat inevitable that the coin (despite being reduced in silver value) would be less valuable than the silver itself. This happened in 1920.
As a result, the UK decided to reduce the silver in it’s coins by a massive 50%. In Canada, the concern was so high that nickel coins were brought into action as a replacement of the silver ones.
In 1946 the UK went silver-less in order to try and mitigate any further rise in the value of silver, causing more coins to be taken out of circulation for melting. Of course, it did. In the early 1960’s silver value shot up in value again. The UK’s preparations in the 40’s meant this had no effect on coin circulation, but it was enough for the US and Canada to strip silver out of their coins once and for all.
The war placed huge demands on so many in such a variety of forms. One of which was the demand for nickel. It was needed for armoured materials for planes, tanks etc. It was in such demand that the ‘war nickel’ was created. This nickel was actually made of no nickel at all and silver made up 45% of it.
This only lasted from 1942-1945 but just goes to show how world events can cause a rise and fall of value in precious metals.
Silver is a precious metal and this led to the silver being more valuable than the coin itself. It meant people melted down coins and less being in circulation. With the concern of this cycle repeating itself, countries over time made their coins contain less and less silver.
Today, there is almost no trace of silver in coins. The only place you can buy a silver coin is on sites like the Royal Mint.