July 10, 2012 – At the last MDC in Vienna Rene van Dijk gave a lecture on pseudo coins. He stressed the fact that pseudo coins have a rather controversial reputation among collectors. He called for better information for collectors about the legal tender status of coins. Not all auditors shared his opinion. Find here some points of view. We have asked Rene van Dijk from the Royal Dutch Mint, Ron Currie from the Perth Mint and Niels Hagemann from MDM Münzhandelsgesellschaft.
Rene van Dijk / Royal Dutch Mint
Mr. van Dijk, at the last Mint Directors Conference you have given a lecture on the fact that we should be careful with the so called pseudo coins. Could you please define what you mean by a pseudo coin?
Pseudo coins are coins that are not meant to be either official commemorative coins or coins for circulation. Most often they are developed by commercial parties for sales in other countries than the official issuing countries.
Wikipedia is noting on non-circulating legal tender that “advanced collectors typically try to avoid buying non-circulating legal tender; buyers are often beginning or superficial collectors”. On the other hand coins like the animal series of Mongolia designed by the Coin Invest Trust have not only been winning the award “coin of the year 2010”, but have risen in price in a way that is rarely seen when “legal” tender issues are concerned. The face value of the coins concerned is 500 tugrik, which is about 0,29 Euro or 37 cents. This coin is definitely not made for circulation. This is a clear counterexample for the Wikipedia statement. What do you think is the reason for that discrepancy?
This is an example indeed. A very beautiful coin series! As I already indicated in my presentation, some collectors value the design more than the official status of a coin.
Are there better and worse pseudo coins?
Of course. As I said, let the collector decide. My point was that he should base his decision on the correct information.
Why are pseudo coins produced?
Because Mints need to make money.
Pseudo coins feature topics rarely seen on “legal” tender issues, which seem to focus on jubilees, sports events and great persons of the past. Pseudo coins give a picture of today’s world with pictures of movie stars, technical highlights and latest events. In former centuries medals and coins have delivered achievements and sensations of their period to posterity. Isn’t it possible that pseudo coins fill the gap, “legal” tender issues have left.
Yes, in that sense the official issuing authorities should take a close look at these developments.
What can official mints learn from pseudo coins?
See above. In terms of designs, but also topics pseudo coins can be a source of inspiration for official mints.
You said in your lecture that “mints have a responsibility to offer correct information to collectors. We need to educate our collectors and tell them about the difference between legal tender and non legal tender, between coins, medals and tokens and the official status of the various objects”. How would you do that de facto?
There a numerous ways to do this. From info on the website (in general) to information on certificates etc.
My point was that there is no right or wrong, collectors should decide what they want to collect, but on the basis of correct information.
Ron Currie / Perth Mint
Dear Mr Currie, The Perth Mint issues both, what Mr. van Dijk would call “legal” tender and so called “pseudo coins”. What is the reason for issuing “pseudo coins”?
The Perth Mint does not issue ‘pseudo’ coins. Every coin issued by The Perth Mint possesses legal tender status. Australian-themed collector coins and each series which comprises Australia’s official bullion coin program are issued as Australian legal tender under the auspices of the Australian Currency Act 1965. Coin programs which display non-Australian themes are issued as legal tender on behalf of overseas government authorities. All numismatic releases are also accompanied by a Certificate of Authenticity from The Perth Mint.
The only other products released by The Perth Mint are precious metal and base metal medallions, precious metal minted bars, and accredited cast investment bars.
Are you testing new technics or interesting topics on pseudo coins?
Testing on pseudo coins is not being conducted at The Perth Mint as they are not produced.
You have issued for Tuvalu a series on pirates especially for young collectors. Do you know anything about the theme preferences of this audience? Has this issue been a success?
The Perth Mint did issue a pirate series which comprised 5 coins that were released from July 2010 until May 2011. This was the first individual Young Collector series which was released following the Nine-Coin $1 albums originally introduced to the market in 2009. On average, more than 5,000 of each pirate coin was sold internationally.
Themes from The Perth Mint’s Young Collector coin program which have been revealed to date include Australian Animals, Space, Backyard Bugs, Mythical Creatures, and Animal Athletes, which is currently being released. After considerable research, all chosen themes have had appeal for both boys and girls. The Perth Mint’s Young Collectors coin program is an ideal way in which parents and grandparents can share their passion for numismatics with the younger members of their families.
What can official mints learn from pseudo coins?
Pseudo coins are merely a marketing tactic imposed by some coin dealers and private minting organisations. They are not something an official mint would be involved with. The Perth Mint does not condone the production of pseudo coins.
Do you want to add anything that is important to you concerning that topic?
As previously mentioned, all coins produced by The Perth Mint are of legal tender status. Those items that are not are medallions, which are clearly marketed as such. The production of pseudo coins is not something The Perth Mint would ever consider.
Niels Hagemann from MDM Münzhandelsgesellschaft
Do you think the distinction between pseudo coins and legal tender is appropriate?
No; a coin is coin and a pseudo coin doesn’t exists – if the coin is not properly authorized it should not be struck by a mint and shall not be called coin at all. All coins are legal tender in the issuing country and can be redeemed at facevalue at the issuing central bank.
Do your clients make the distinction between pseudo coins and legal tender?
No as a pseudo coin doesn’t exist – our client differentiate between coins and medallions / medals.
Traditionally until the late 1960s medals have fulfilled the function of pseudo coins. This has changed. It has become very difficult to sell medals. What do you think are the reasons for this development?
Again this question imposes the existence of a pseudo coin which I deny – medals have a place in the collector market in those areas where the events are not or not enough commemorated from the collectors perspective – if the collector has a choice between a coin and a medal the most likely go for the coin. The medals cover those areas which are uncovered by coins.
What can official mints learn from pseudo coins?
The mints need to insist on proper documentation on the legal tender status if any company / organisation / bank etc wants to allocate a commemorative piece with a face value as part of the design – if the legal tender confirmation doesn’t exist the mints shall reject the production of the product.
Do you want to add anything that is important to you concerning that topic?
As already mentioned the discussion is misleading as a coin is a coin and there is such thing as a pseudo coin – the proper discussion shall focus on legal tender documentation or the difference between coins and coin-like medals in comparable finishes.