As a community group supplier of clearance stock screws, bolts & fixings, Cabinz has been exploring this idea.
Their currency value aside . Low value coins have little intrinsic value, apart from their scrap metal value & a few uses , such as a screw driver.
In an inflationary environment, a metal coins currency value can quickly become nearly worthless.
However, small metal nuts, bolts, screws, nails & other building materials fixings retain their value as a fixing for building things, even if the currency declines in value.
If a Government introduced such a "functional coin" . The may need to be stamped or engraved to stop criminals introducing their own screws to dilute the coin currency.
Perhaps if the value was small, they would not be worth counterfeiting.
There are disadvantages , like difficult vending machine use, screws would have to be in containers to stop pocket wear etc.
Advantages are that the coins could be used as useful fixings in the house / garden , while actually being the households financial savings.
Alternatively the fixings could be used as local trading currencies , not national ones . eg Lets
https://en.wikipedia.org/wiki/Local_exchange_trading_system
I have written to the Uk's Royal Mint . Their museum has replied with the statement below, so to their knowledge, this is an original idea.
"Dear Mr Ridley,
We are unaware of any kind of fixtures being used as currency both in the United Kingdom and overseas, although some overseas countries have, in the past, used natural objects such as cowrie shells in lieu of coins.
Historically, day-to-day transactions would have been built on systems of trade or payment in kind, with coins in precious metals such as gold and silver being reserved for paying taxes, use in trade, or displays of wealth. Ultimately, in the past currency systems would have made use of what was readily to hand, and acceptable to a wider populace.
Although your idea to use items such as nails, screws and bolts is interesting, such a system may have a limited appeal beyond a certain group of people. In addition, it would be difficult to add security features to such pieces in order to prevent them from being counterfeited. "