It doesn’t appear — at least from consumer trends in the U.S. — that coins replacing the dollar note is going to become the wave of the future.
As a Wall Street Journal article references, for the coin to truly trump the U.S. paper dollar, Congress would have to pick one over the other in order to guide the American public toward the coin. But that didn’t happen as both the coin and dollar remain in circulation. The problem? People didn’t really care for the clunky coin over the slim dollar.
As a result, the federal government has $1.36 billion worth of the dollar coins that no one seems to know what to do with, WSJ reported. Last year, while there were 240 million in circulation — a 50 percent dip from the number in 2010, the Journal points out there is still a substantial amount not being moved around. A chunk went to Latin America, El Salvador and Ecuador (where the USD is the official currency), but a majority remained in the piled on shelves in the Fed’s warehouse.
In most developed nations, paper currency for values of $1 aren’t as popular as in the U.S. and there isn’t always a coin and paper for each value — like in the case of the dollar coin and dollar note, which avoids the overlap that’s kept those U.S. dollar coins from shuffling around. Coins, of course, are more durable than the dollar bill, but U.S. consumers don’t seem open to carrying around a pocketful of change.
The coin versus dollar debate, however, is about longevity against cost.
“Today, a circulating one-dollar bill lasts an average of 5.9 years and costs about 4.9 cents to produce. A coin still lasts five or six times as long as a note, but it costs about four times as much to produce,” wrote WSJ author Jo Craven McGinty. Overtime, it seems tapping out the dollar note for the dollar coin would be cost effective, but that’s not the route the U.S. is heading. The WSJ cited a figure from 2012 (the last time the issue was reviewed) that indicated the U.S. could save $146 million a year, and $4.4 billion over a 30 year period.
The potential value of producing the coins, however, is expected to dip overtime.
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