Commemorative Coin for the 40th Anniversary of the Founding of the People’s Bank of China
Over the weekend, someone asked me in his post about the value of the “Founding of the Bank” commemorative coin. Today I will discuss it.
The king of all the circulating commemorative coins, for the 40th Anniversary of the Founding of the People’s Bank of China, is often known as “Founding of the Bank” or “40th Anniversary of the Founding of the Bank.” Here I would like to make it clear that we are talking about the 40th Anniversary of the People’s Bank, not the Construction Bank. (Translator’s note: “founding of the bank” and “Construction Bank” are the same in Chinese.) Only it is commonly known as “Founding of the Bank”. The Construction Bank is not good enough to have a commemorative coin issued for itself, or at least at the moment, it is not qualified for issuing a circulating commemorative coin. I was asked about the potential and value of this coin. How come a coin worth 1 Yuan could rise as high 4,000 Yuan? Let me begin with some basic information of this coin.
The coin "40th Anniversary of the Founding of the People’s Bank” was released in 1988, with a mintage of 2.04 million, which is relatively low among commemorative coins, but not the lowest. It is the most expensive, though. When this commemorative coin was released, few people were collecting coins. It was released like common circulating coins. Now commemorative coins can be exchanged at the bank, but at that time, this coin was “sold” within the bank. Why were quotation marks used on “sold”? There was a simple reason. At that time, this coin was given out as part of the salary. For example your salary was 32 Yuan, with 2 Yuan as change. And you were given a one Yuan coin, which was a commemorative coin. It even happened that when this commemorative coin was used in shopping, it was rejected, as it was mistaken for a counterfeit. If someone bought such a coin with 2 Yuan, he would surely be picked on by his family members. Many people gave it away as gifts, or have kept it around because it couldn’t even buy a steamed bun, as it was not accepted in shops.
Now when the high price of the “Founding of the Bank” is mentioned, the first reaction would be attributing it to the coin’s low mintage. Some pretenders would claim that “Founding of the Bank” had the lowest mintage among commemorative coins. But Teacher Dandan hereby tells you that they are wrong. Ningxia had the lowest mintage, but the current price of Ningxia is less than one third of the price of “Founding of the Bank”. Ningxia’s mintage was 1.56 million, but the price is much lower. Many cannot figure out why. The answer is actually very simple. The distribution channels led to the current situation. The Ningxia commemorative coin was released in the local banks in the Ningxia Autonomous Region. Banks in other areas were given some, but the quantity was small. Most Ningxia commemorative coins were distributed to banks in the Ningxia Autonomous Region. As supervision on these local banks is weaker, coins have been circulating back to the market from the local banks over the years. The surviving mintage is high. On the other hand, the “Founding of the Bank” coin was released exclusively by the People’s Bank. Most of the stock of this commemorative coin is kept by the Central Bank, like the Olympics Commemorative Banknotes. In simple and easy-to-understand terms, these two coins are not in the same rank. The one with a lower mintage is owned by a maketmaker like a rich guy in a small town. The other with a larger mintage is owned by a maketmaker like the richest guy in the country, who is also the issuer of the coin. The power of the two maketmakers is beyond comparison. The result is that Ningxia had a lower issuing mintage, and yet the surviving mintage is higher than “Founding of the Bank”. This is the fundamental reason why the latter finally became the king of circulating commemorative coins.
“Founding of the Bank” has been sailing smoothly all these years, and has gone entirely beyond speculation, into the realm of collection. With the great price upswing of commemorative coins last year, the price of lunars shot up several folds. Yet the price of “Founding of the Bank” only doubled. It has faded out of the radar screen of major speculators, and the quantity is well-known, too low for speculation. I personally believe that the price of “Founding of the Bank” will keep rising steadily in the future, driven by collection needs accompanied by investment. At the end of every year, when the complete set of commemorative coins would be consumed as gifts, “Founding of the Bank” is a must-have coin. Unlike paper banknotes which distinguish between major and minor sets of the fourth and fifth issuance, there is only one complete commemorative coin set. Such a set won’t be complete without “Founding of the Bank”. And a commemorative coin collector should have at least one “Founding of the Bank” coin. So “Founding of the Bank” still has the potential upside for its price. But I don’t believe that it is possible to drive the price up 6 or 7 times in one year, like some types subject to speculation.
Now the condition of “Founding of the Bank”. This coin has more or less minor bag marks when purchased new. The major reason is that the coins were packed in rolls when they left the mint. Rubbing between coins often leads to some light wear. This soft damage is not a big deal for the coin, but attention should be paid to dents from hard knocks. Cleaned coins also should be watched out for. It is easy to tell them apart. The surface of cleaned coins appears white and cleaner. In other words, it is much too clean. The complete set of commemorative coins at Lugong may have half of the coins cleaned. Those subject to cleaning include “Founding of the Bank”, Ningxia, the 6th Sports Meet, and the Animal series. Sometimes the 35th Anniversary of the PRC and Tibet are cleaned, too. Watch out for them.
Finally I will talk about the “Founding of the Bank” with holes. Some dealers on the market specifically buy “Founding of the Bank” with holes in it. You may ask why. Well, they doctor the coin. Some skilled guys can pick one from the holed “Founding of the Bank” coins and melt it, and then fill up the holes with the melted metal. After some light polishing, a holed “Founding of the Bank” is reborn. You may ask why melt “Founding of the Bank”. Why not some other coin? Of course not! Commemorative coins are made from alloys. The makeup of the alloys is never made public. Filling the hole with other materials will result in differences in weight and color, sometimes pretty noticeable differences. So don’t throw away “Founding of the Bank” with a hole in it. It is valuable, too.
Collection index: 10 (King of the commemorative coins, with no challenger, a must-have for commemorative coin collection)
Investment Index: 8