Commodity money is a type of money whose value comes from a commodity of which it is made. It consists of objects that have value or use in themselves, as well as their value in buying goods. Commodity money is to be distinguished from representative money, which is a certificate or token that can be exchanged for the underlying commodity, but only by a formal process. Examples of commodities that have been used as media of exchange include gold, silver, copper, salt, peppercorns, tea, decorated belts, shells, alcohol, cigarettes, silk, candy, nails, cocoa beans, cowries, and barley.

Commodity money has intrinsic value, meaning that it has worth independent of its use as money. Its value is directly perceived by its users, who recognize the utility or beauty of the tokens as goods in themselves. Commodity money is similar to barter, but is distinguishable from it in having a single recognized unit of exchange.

Commodity money has some disadvantages, such as issues with perishability, indivisibility, and heterogeneity. For example, because many items could not be kept for a long time, people were unable to repay loans or save them for future needs. Commodity money also risks widespread price fluctuations due to commodity price changes.

In contrast to commodity money, fiat moneys value is based largely on public faith in the issuer. Fiat money does not have intrinsic value, while commodity money often does. Changes in public confidence in a government issuing fiat money may be enough to make the fiat currency worthless. Fiat money is therefore more at risk of inflation because its value is not intrinsic.