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Adebasement of coinage is the practice of lowering the intrinsic value ofcoins, especially when used in connection withcommodity money, such asgold orsilver coins, while continuing to circulate it at face value. A coin is said to be debased if the quantity of gold, silver, copper or nickel in the coin is reduced.

InRoman currency, the value of thedenarius was gradually decreased over time as theRoman government altered both the size and the silver content of the coin.^[1] Originally, thesilver used was nearly pure, weighing about 4.5grams. From time to time, this was reduced. During theJulio-Claudian dynasty, thedenarius contained approximately 4 grams of silver, and then was reduced to 3.8 grams underNero. The denarius continued to shrink in size and purity, until by the second half of the third century, it was only about 2% silver, and was replaced by theArgenteus.

Weight ofakçe in grams of silver and index.^[2]

ThroughoutThai history, the silver content of theSiamese currency was quite pure, hovering around0.900 fineness ever since its adoption in 1238 AD. There were various debasements of the silver content of these coins. Initially, the composition was0.900 fineness, which was debased to0.800 in 1915. In 1918, duringWorld War I, silver prices surged, leading to a change in the composition to0.650. In 1919, the silver percentage dropped further to0.500. After the war, in 1919, the composition returned to0.650. In 1917, the price of silver rose and exceeded the face value of silver coins. The coins were then melted down and sold. The government solved this by changing the pure silver coin to alloy.Rama VI eventually forbade exports of Siamese coins. In 1918, the usage of 1-baht coins was nullified and 1-baht banknotes were introduced. Coins were recalled and kept as a national reserve, while the lower denominated silver coin were sill minted, which was seen whenRama VII coin was produced in two silver coin: 50 Satang and 25 Satang in0.650 fineness.

AfterWorld War II, the silver content of the coin was debased to0.030, and was subsequently depegged from silver after 1962.

Debasement lowers the intrinsic value of the coinage and so more coins can be made with the same quantity of precious metal. If done too frequently, debasement may lead to a new coin being adopted as a standard currency, as when theOttomanakçe was replaced by thekuruş (1 kuruş = 120akçe), with the para (1/40 kuruş) as a subunit. The kuruş in turn later became a subdivision of thelira.

An administrative method to debase currency is for themint to start issuing coins of a certain face value, but with less metal content than previous issues. There will be an incentive to bring the old coins to the mint for re-minting – seeGresham's law. A revenue, calledseigniorage, is made on this minting process.

When done by an individual, precious metal was physically removed from the coin, which could then be passed on at the original face value, leaving the debaser with a profit. This physical debasement was effected by several methods, including clipping (shaving metal from the coin's circumference) and sweating (shaking the coins in a bag and collecting the dust worn off).

Until the mid-20th century, coins were often made ofsilver or (rarely)gold, which were quite soft and prone to wear. This meant coins naturally got lighter (and thus less valuable) as they aged, so coins that had lost a small amount ofbullion would go unnoticed. Modern coins used as currency are made of hard, cheap metals such assteel,copper, or acopper-nickel alloy, reducing wear and making it difficult and unprofitable to debase them.

Clipping is the act of shaving off a small portion of a precious metal coin for profit. Over time, the precious metal clippings could be saved up and melted into bullion or used to make new coins.^[3][4]

Coin clipping was usually considered by the law to be of a similar magnitude tocounterfeiting, and was occasionally punished bydeath,^[3][5][6] a fate which befell English counterfeiters Thomas Rogers and Anne Rogers in 1690.^[7] Even amongpirates, clipping coins was considered a serious breach of trust.Henry Avery's pirate fleet attacked the treasure shipGunsway in 1695 and netted one of the largest pirate captures in history. When fellow pirateWilliam May's crew were found to have traded clipped coins to Avery's crew, Avery took back nearly all the treasure he had shared with May and his men and sent them away.^[8]

Coin clipping is why many coins have the rim of the coinmarked with stripes (milling orreeding), text (engraving) or some other pattern that would be destroyed if the coin were clipped. This practice is attributed toIsaac Newton, who was appointedMaster of theRoyal Mint 1699.^[9] Although most modernfiat coins are unprofitable to clip, modern milling can be a deterrent to counterfeiting, an aid to the blind to distinguish different denominations, or purely decorative.

In the process of sweating, coins were placed in a bag and shaken. The bits of metal that had worn off the coins were recovered from the bottom of the bag.^[10] Sweating tended to wear the coin in a more natural way than clipping, and so was harder to detect.^[11]

If the coin was large, a hole could be punched out of the middle, and the face of the coin hammered to close up the hole.^[12] Or the coin could be sawn in half, and a plug of metal extracted from the interior. After filling the hole with a cheaper metal, the two halves would be welded back together again.^[13] Verbal references to plugged quarters and plugged dimes eventually yielded the common phrase "not worth a plugged nickel" (or 'plug nickel', or even a plugged cent), emphasizing the worthlessness of such a tampered coin.^[14]

• "Debasement" is also sometimes used to refer to the tendency of silver or gold coins to be "shaved", that is, to have small amounts shaved off the edges of the coins by unscrupulous users, thereby reducing the actual precious metal content of the coin. In order to prevent this, silver and gold coins began to be produced with milled edges, as many coins still do by tradition, although they no longer contain valuable metals. For example, theU.S.quarter anddime have milled edges. Coins that have traditionally been made purely of base metals, such as the U.S.nickel or thepenny, are more likely to have unmilled edges.
• By analogy, "debased currency" is sometimes used for anything whose value has been reduced, such as "Stardom is an utterly debased currency"^[15]

• Devaluation
• Inflation
• Inflationism
• Inflation hedge
• Financial repression, similar process via different mechanism
• Money burning
• William Wood, center of a political controversy involving the possible debasement of coins
• Shrinkflation

• Allen, Larry (2009).The encyclopedia of money (2 ed.).ABC-CLIO.ISBN 978-1-59884-251-7.
• Sherwood, Sidney (1893).The history and theory of money.Lippincott.ISBN 978-1-02-237255-9.{{cite book}}:ISBN / Date incompatibility (help)

• Debasement of Coinage at dictionary.cambridge.org
• "Fun Facts".U.S. Mint.Archived from the original on 19 May 2022. Retrieved3 December 2022.

• Coins
• Currency
• Inflation
• Monetary economics
• Monetary policy

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