This is a £20 coin from Gibraltar. The £20 is an unusual denomination which some countries, including the UK, have started using for commemorative coins. You can’t spend it, because nobody will accept it, but they can charge quite a high price for it because of the face value. The silver is worth about £6 and the collectable value is not great in most cases.

It is, in short, a bit of a rip-off.

Don’t be fooled about the legal tender aspect, when you look into it the definition of legal tender is very tightly drawn. It appears that legal tender can be used to pay court costs and fines, but nothing else. Nobody else needs to accept it, even if it is legal tender.

This basically means that the Royal Mint can make coins which don’t have to be taken back. We encountered this problem recently when we tried to pay some £5 coins in at the bank. They informed us that they no longer take them. Normally we pay £5 for a UK coin and most of them go straight to the bank as nobody collects them. We can’t do that now, so we can’t pay £5. People, quite rightly, don’t like that. We now tell them to try their bank or post office to see if they are still taking them.

The same is true for £20 and £100 coins, though as far as we know, no bank or post office will take them. We actually sell £100 coins for less than face value at times. It’s a ridiculous side effect of the modern coin trade. Read this article for an insight into what goes on, but before you do, may I just add to the information they provide. If you sell a £100 coin on eBay for £130 as they say, you will pay eBay and PayPal approximately 15% of the cost in fees, so the £130 immediately falls to £115.

Buy coins because they are beautiful, historical, interesting or educational. Or buy them as a present for future generations. If you want an investment ask a bank manager about it, not a numismatist.

This is the reverse of the Gibraltar coin, which is a lovely design. It commemorates the efforts of the Merchant Navy in the Battle of the Atlantic.

Gibraltar £20 Coin 2016

Here’s the best value £100 coin on eBay with a Buy it Now offer of £69.99. I just checked all the ones that sold over the last month. There were 12 sold. One made £140. The other eleven all made less than face value.

There is something called seigniorage, which I don’t understand completely. It’s a branch of Economics, which is also something I struggle to grasp. Basically, if it costs the US Mint five cents to produce a quarter they make twenty cents every time someone puts a quarter in their collection. If you produce collectable quarters, such as the State Quarters Series, this can add up. In fact, it adds up to $3 billion. The USA is the best at this, but the Royal Mint is making a big effort to get a piece of the action.

Tomorrow I am planning two more posts, one of which will be to tell you more about this Gibraltar £20 coin. It is very interesting.