What were the limitations of metal currency?
Answers
Limitations of metal currency are as followed:
1) metallic currency needed to be carried in bulk in order to deal with large payments or large number of transactions. This was the major drawback.
2) measuring the weight and other measurements of the metallic money at every stage needed to be done, which made it very difficult to handle it.
3) it wasn't easy to determine the value of metals and compare their values.
4) metallic currency was not economical as it proved to be more costly as compared to the plastic or paper money.
The limitations of metal currency are, they are bulky and it would be very difficult to carry them for doing large transactions, there are chances that they would be mixed with other metals which will affect their purity and ultimately their value.
EXPLANATION:
If the coins made up of different metals like gold, silver, copper, or bronze, etc are used as a regular way to buy and sell commodities then such type of currency exchange is called metal currency. It was the most usual form of transactions in earlier periods of history.
But, it is not in regular use today because of some of its limitations. As these coins are bulky and heavy and for making out some higher transactions huge bulk of these coins would be needed and it would be very difficult to carry them and hence it is not a feasible way. Another limitation related to it is the purity of coins.
These metal coins can be mixed with other cheaper metals which will affect the purity of coin which will ultimately affect its value, and there is no immediate way of finding this. All these limitations are considered and that's why the metal currency is not a regular form of transactions in present times.