1. Convenience: Paper money is more convenient for making large payments or carrying larger amounts of money. It is lightweight, easy to carry and can be easily stored in wallets, pockets or purses. Coins, on the other hand, are more suitable for small transactions and everyday use. They are more durable and can be easily handled, making them convenient for small purchases or giving change.
2. Cost: Paper money is more cost-effective to produce compared to coins. The cost of producing a paper note is significantly lower than that of producing a metal coin of equivalent value. This cost effectiveness allows for the production of a wider range of denominations and helps maintain the stability and efficiency of the monetary system.
3. Durability and Longevity: Coins are more durable and have a longer lifespan compared to paper money. Metal coins can withstand wear and tear and can last for several years without deteriorating significantly. This makes them ideal for transactions involving harsh environments or regular use. Paper money, on the other hand, can deteriorate over time due to factors like moisture, folding, tearing, or general wear and tear.
4. Security and Authentication: Coins have built-in security features, such as unique designs, milling, or distinctive shapes, that make them difficult to counterfeit. They also provide a tactile element that helps people with visual impairments identify different denominations. Paper money incorporates various security features like watermarks, security threads, holograms, and specialized inks to prevent counterfeiting. These security measures enhance the overall trustworthiness and reliability of the monetary system.
5. Denomination Range: Paper money and coins cater to different ranges of denominations. Coins typically come in small denominations, suitable for everyday transactions and small purchases. Paper money, on the other hand, comes in a wider range of denominations, including higher values, which makes them suitable for larger payments, investments, or savings. This allows individuals and businesses to choose the most appropriate form of currency for their needs.
By using paper money and coins together, the monetary system achieves a balance between convenience, cost-effectiveness, durability, security, and diversity of denominations, ensuring efficient and secure transactions for various circumstances and user preferences.