When nations moved away from metallic currency standards, to simply issuing bills.

Gold and silver are fantastic tokens of wealth. They are also horribly inflexible when it comes to the monetary needs of a nation. If they aren't moving around, then there is no money, and if you can't get more of it, then no more money is brought into play, and economies grind to a halt. This can be witnessed in the Panic of 1873, where among other things, Germany and the US moving off silver standards caused a loss in value of silver coinage. (The Panic was a highly complex action, but it is a favorite example of mine of the risks of metallic based currency).

Money today is based off the good faith and credit of the issuing nation, as opposed to the value of the metal contained in a coin, or what the metal value the currency could be redeemed for. By being able to issue money on demand, a central bank can expand or contract the monetary supply as dictated, rather they rely on the limits of metallic currency.

Coins are now made of a base metal, primarily for purposes of longevity and cost of manufacturing, and are simply fractional tokens of small bills, or substitutes for low denomination bills.