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When people talk about currency reform they either talk about getting rid of the lowest value coin (like the penny) or the highest value banknote. The USA circulated millions of $500 and $1000 banknotes before WWII plus thousands of $5000 and $10000 banknotes. Canada has a CAD$1000 banknote up until the year 2000, and the European Union has decided not to include the 500 Euro banknote in it's new series (although the old ones are still legal tender, they are destroyed by central bank if they receive them).
South Korea has it's lowest value banknote worth 90 cents. In three years they will declare all of their coins as invalid. You can (1) pay to the nearest banknote above what you owe and give up your change, (2) pay with a debit, credit or phone app, or (3) receive your change on a T-Money Card. https://en.wikipedia.org/wiki/T-money
Although small denomination banknotes will still be valid money, naturally they will largely stop being used as people make small purchases electronically. It is expected that only the two largest denomination banknote (worth ~ US$9 and US$45) will remain in widespread circulation as the largest denomination banknote has a wider range of use beyond petty purchases.
Should the USA put a time line on the minting of coins? As policy the USA and Canada do not declare any money invalid, but if new coins are not minted they will gradually vanish from use.
There was at least one thread about this in the economics forum.
But, yeah, we should start the end of coin circulation. Pennies and 0.50 coins first. $2 bill while we are at it. Those can all go immediately.
I'm not sure if something similar to the T-Money is possible in the US. Right now, all businesses are charged for electronic processing, we need to find a way to circumvent that. They have something similar in China as well and I'm assuming in many countries. It doesn't cost the business or seller anything to run the transaction. Until then, most businesses in the US will still prefer cash.
But, yeah, we should start the end of coin circulation. Pennies and 0.50 coins first. $2 bill while we are at it. Those can all go immediately.
Pennies and nickels are respectively 400 and 200 units per kilogram or $4 and $10 per kilogram.
The raw metal cost $6/kg for Copper, $10-$15/kg for Nickel and $3/kg for Zinc. So a 75% Copper 25% Nickel combination is ~ $8/kg.
With raw material prices at roughly three quarter of the final product, it is virtually impossible to produce pennies and nickels for less than face value.
Total Unit Cost is Production and Distribution
The Mint reports the Total Unit cost 1.82 cents per penny and 6.6 cents per nickel for 2017
Now dimes, quarters and half dollars are all worth $20/lb so with raw metal costs less than about $4/lb unless the mint is completely out of control, it should be able to make a profit.
The Mint reports the Total Unit cost 3.33 cents per dime and 8.24 cents per quarter for 2017
But the handling of dimes and quarters is still a drain on business. The half dollar is made in such small quantities that it is simply stupid to keep making them.
Quote:
Originally Posted by Mattks
I'm not sure if something similar to the T-Money is possible in the US. Right now, all businesses are charged for electronic processing, we need to find a way to circumvent that.
US businesses are not charged for electronic processing, they are charged for dealing with commercial institutions which are designed to make a profit. Unfortunately commercial institutions are the only ones doing electronic processing.
Perhaps the government should redirect some of the $1.8 billion a year they spend on the US Mint to developing electronic coins for transactions of less than $5 (so as not to interfere with commercial bank transactions). That way you can get your change on a phone app or something similar to a T-money card.
Last edited by PacoMartin; 08-22-2018 at 04:35 AM..
I love the size of dimes, and quarters are fine too for their value. We'd be good with just those two.
Dimes, quarters and half dollars are all worth $20/lb. But nobody likes half dollars as they are 40 coins to the pound, which is to big for most people. Quarters are 80 coins to one pound, and dimes are 200 coins to one pound.
But this idea of getting rid of coins entirely has only been discussed about academically, but now that Korea is actually going to do it, other countries may follow.
I'd love to drop pennies. I'm not sure why it hasn't been done yet - seems like a no-brainer.
I'd be fine dropping nickles too. Size-wise, they are big and bulky.
I love the size of dimes, and quarters are fine too for their value. We'd be good with just those two.
I completely agree.
Get rid of pennies and nickels. Dimes become the smallest currency denomination, but if people wanted to get rid of them, I would be ok with that.
Quarters are still useful, the 50 cent piece is a novelty, I couldn’t care less one way or the other. Eliminate dollar bills and replace with a properly designed coin. Both the British pound and the Canadian looney are fine pieces of currency that are not confused for anything else, the US could do something similar.
Get rid of pennies and nickels. Dimes become the smallest currency denomination, but if people wanted to get rid of them, I would be ok with that.
To the best of my knowledge no country before Korea has gotten rid of coins as small as a dime. Pennies and Nickels are $4 and $10 per kilogram, and hence are only produced as a loss. Dimes and Quarters are both $20 per pound, so it hardly seems worthwhile to keep the quarter and dump the dime.
But Korea is going to go the banknote (worth about 89 cents) as the smallest divisible unit of currency. They could have eliminated the penny and the nickel equivalent, but Korea argues that it makes more sense to completely eliminate coins. If you eliminate the penny and the nickel it won't change people's habits, they will just give up their change. By eliminating all coins it forces people to readily use an electronic payment mechanism.
Initially, Koreans will be just as likely to use their largest denomination banknote (worth $44.51) but in the event that North Korea successfully counterfeits that banknote, it will be much easier for South Korea to switch to a cashless society overnight.
Eliminate dollar bills and replace with a properly designed coin. Both the British pound and the Canadian looney are fine pieces of currency that are not confused for anything else, the US could do something similar.
I've heard this before. But coins just are not convenient to carry. If you are a woman with a purse or a man that carries a coinpurse in his pocket, there is a spot for them. But for men with a pocket wallet, coins suck. Dollar bills are so much easier to carry, I just can't see how replacing them with coins would work in reality. Even many women will rarely bother to dig through their coins in their purse to use them at the register.
We've had dollar coins in the US before. The Sacagawea dollar was a decent coin, didn't look like anything else we had. They just won't catch on here (which is fine with me).
I've heard this before. But coins just are not convenient to carry. If you are a woman with a purse or a man that carries a coinpurse in his pocket, there is a spot for them. But for men with a pocket wallet, coins suck. Dollar bills are so much easier to carry, I just can't see how replacing them with coins would work in reality. Even many women will rarely bother to dig through their coins in their purse to use them at the register.
We've had dollar coins in the US before. The Sacagawea dollar was a decent coin, didn't look like anything else we had. They just won't catch on here (which is fine with me).
Every other country in the world seems to have worked it out. It boggles the mind that Americans cannot come up with a way to carry coinage without having civilization grind to a halt.
Decades of inflation have rendered our lowest valued coins virtually worthless. Five and dime stores are now dollar stores, and even dollar stores no longer advertise “everything for a dollar”. In years past you could buy pieces of candy or small bits of hardware (washers, etc) for a penny or a nickel, but not anymore. Pennies, nickels and even dimes now represent a fractional value for our smallest purchases. Do we really need a coin that represents 1/20 of our smallest piece of candy? Who buys 1/20 of a piece of candy, and what do you do with that coin? I keep them in a jar at home because they aren’t worth my t8me to convert into anything.
Quarters and dollars still represent something. You can buy parking, or a cheap lollipop. Two quarters and you can get an aspirin from a convenience store I think. Not much else. You don’t need to carry many of these, you simply need to have 1-2 to ease some transactions.
I've heard this before. But coins just are not convenient to carry. If you are a woman with a purse or a man that carries a coinpurse in his pocket, there is a spot for them. But for men with a pocket wallet, coins suck. e).
Coinpurse. (I carry a wallet too)
One of those little rubber ones that open when you squeeze it and isn't much bigger than the face of a watch.
I pay cash, exact change most of the time (never gets to be too much because I USE them) and I'm done and away LONG before those SLOW ASSED PEOPLE using their cards and retarded phone apps that take FOREVER!!!!
And yes, I pick up pennies on the parking lot.... Get your grubby paws off my pennies!
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