Definition

Noun: * Coins or other forms of currency whose face value is greater than the value of the material from which they are made: This refers to money that is accepted as a medium of exchange based on government decree or social convention, not because the physical token itself contains precious metal worth its stated value. Modern coins and paper money are examples of token money.

Examples of Usage

• Noun:
  • A quarter is token money; the metal in it is worth much less than twenty-five cents.
  • The transition from commodity money to token money was a key development in modern economics.
  • Fiat currency, like the dollar bill, is a type of token money.

Advanced Usage

• Conceptual Use: The term is often used in economic and historical discussions to contrast with "commodity money" (like gold coins), where the material itself has intrinsic value.
  • The system relies entirely on token money, backed by the full faith and credit of the government.

Variants and Related Words

• Fiat Money (n): Currency that a government has declared to be legal tender, but it is not backed by a physical commodity. All fiat money is token money, but the term "fiat" emphasizes the government decree.
• Representative Money (n): Money that represents a claim on a commodity (like gold or silver) that can be redeemed. This is different from token money, as it is backed by something of intrinsic value.

Synonyms

• Fiduciary Money: Money that depends for its value on public confidence and trust in the issuer.
• Credit Money: Money that represents a promise to pay, often used interchangeably in some economic contexts.

Related Phrases

• Legal Tender: The legally recognized money that must be accepted if offered in payment of a debt. Token money is typically designated as legal tender.
  • These coins are token money and are considered legal tender for all debts.

Related Concepts

• Intrinsic Value: The value of the material of the money itself (e.g., the market value of the metal in a coin).
• Face Value: The nominal or stated value printed on the money (e.g., "$1" on a bill or "25¢" on a quarter). For token money, the face value exceeds the intrinsic value.

Noun

1. coins of regular issue whose face value is greater than their intrinsic value