changing from coins to paper money has historically been a hard thing to do, people simply don't trust a little piece of paper as much as they do a coin. the only reason people started using paper money was because it was backed up by gold so you could simply take the paper money and go to the bank and exchange it for a sum of gold of equivalent value. here though there's nothing at all backing the currency, you are planning on melting down all the copper coins so what exactly is backing up your paper money?
there's also the idea that other people can fake coins but wouldn't be able to take paper money because only the royal family can put royal seals on things. do your coins not have the royal seal on them and why would someone not be able to take the royal seal? is it magic?