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Question for money theorists

Modern paper currency (unlike coinage) incorporates a unique identifier for each bill, like a serial number. (This makes me think of a virtual addressing space.) Does this make any difference to modern money?

Do coins and bills function differently because one can be uniquely identified and the other cannot?

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Submitted by hipparchia on

Do coins and bills function differently because one can be uniquely identified and the other cannot?

my understanding is that it is - relatively speaking - cheap, easy, and quick to manufacture large amounts of fake paper money; not so much for coins.

Miguel Sanchez's picture
Submitted by Miguel Sanchez on

I think paper and coined money are equally fungible even though paper bills have serial numbers. So much so that the phrase 'cash' is used to describe paper money even though it originally referred to coins, as in the expression 'cold hard cash'. Why do you ask?

Submitted by lambert on

I ask because we can think of paper money ( and digital money, I would think) as creating a virtual address space. We can't think of coins that way, unless we give them IDs too.

Also, digital money and bills are under the control of the Fed. But coinage is under control of the Treasury. So here is a big difference (to a geek anyhow) that is also mirrrored institutionally.

So it would seem strange that there is no effect, but perhaps there is.

Cujo359's picture
Submitted by Cujo359 on

I'm not a monetary theorist, but ...

I think the reason coins don't have serial number is that they were once worth whatever metal was in them. Now, of course, that's no longer true, but most have so little value that it seems silly to me to put serial numbers on them. It's a bit like putting serial numbers on potato chips.

Paper money, OTOH, is inherently worth more than the material, so a serial number, supposedly representing a way of tracing back to who made it and when, etc., would make more sense. Most things of this nature seem to have some form if ID string or other.

Yes, that's just speculation on my part, but that's my story and I'm sticking to it...

Submitted by Hugh on

I agree that serial numbering is probably both for identification and anti-counterfeiting purposes. If someone robs a bank and is caught with bills whose serial numbers match those of the stolen notes, that's evidence. If a counterfeiter is caught with several bills all having the same serial numbers, that too is evidence. But there could also be a historical component to this as well. Why for example print serial numbers on lower denomination bills like ones and fives? It's not like either are going to be a major target of either bank robbers or counterfeiters.

Cujo359's picture
Submitted by Cujo359 on

Yes, I'm sure there's some form of institutional inertia regarding serial numbers on low-value bills. If nothing else, you'd think they use the same types of presses to print all those bills. So they could just be using the serial number print thingy because it's there, and then all the bills of different denomination have a consistent look.