Why is the bullion system different from the coin system?

          Derived from the name of the French finance minister under Louis XIII, Claude de Bullion, ‘bullions’ are bars or ingots of valuable metals like gold, silver, and platinum.

         The form of the metal, however, is not important in this system; instead, it is the weight and purity that count.

          Though bullions ensured purity, it was difficult to get enough quantity of gold and silver. That was when coins made of metal alloys appeared in the market. Their values were also fixed, depending on the metal used.

             Today, bullion coins are meant mostly for the purpose of investment, and are minted by official agencies. Though they have the status of legal tender, such coins do not enter common circulation.

             They are mainly seen in the form of bars and jewellery. Yet, bullion coins like the Maria Theresa thaler of Europe, and the Krugerrand of South Africa were in circulation throughout the 20th century.