Would You Use a Dollar Coin?

by Jessica Sommerfield · 8 comments

Recently, Congress reintroduced a bill that would push for a dollar coin to replace the dollar bill. The chief argument for switching to coin dollars is the durability of coins versus paper money.

Since dollars are heavily used, they don’t last as long as other denominations of paper money. The average lifespan of a dollar bill is only a little over four years. Coins, on the other hand, have a lifespan of roughly 30 years. Consequently, the switch to dollar coins in currency would mean lower production costs for the treasury.

The Pros and Cons of Dollar Coins

This step, although initially increasing the U.S. Treasury’s currency production costs from 5 to 18 cents per dollar, would save the treasury (and taxpayers) over 13 million dollars in the next 30 years. Since the switch seems like a win-win proposal, why hasn’t it already been done?

While there are dollar coins in circulation, they’re not widely used. The silver Susan B. Anthony dollar coin released in the 70s didn’t stick, and neither did the gold Sacajawea dollar coins released in 2000 (although they were pretty).

For the businessman, the biggest downside to using coins is that they’re heavier and bulkier, and therefore, less convenient to carry and less cost-effective to mass-transport. Changing to dollar coins would also force businesses and financial institutions to convert equipment to accept the new currency, which would be a time- and money-consuming project.

Stop and think… do you have even one dollar coin in your possession? If you do, it’s probably part of a coin collection. People prefer dollar bills simply because they’re easier to deal with. Faced with a choice, Americans choose the bill over the coin.

But considering that the United States is one of the few remaining Western Hemisphere nations with a paper dollar, it’s obvious that switching to dollar coins is becoming popular enough to catch on. Some think that if we removed dollar bills from circulation and replaced them with coins — thereby forcing the use of coins — it would soon become the new normal.

How the COINS Act Could Affect You

The bill, known as the Currency Optimization, Innovation, and National Savings Act (COINS Act) is yet another way the government is trying desperately to save money and avoid increasing the trillions of dollars in national debt.

Both political parties seem to agree that this bill would be a small way to save millions of dollars over the next several decades — a drop in the bucket compared to the necessary spending cuts to salvage the debt crisis — but a drop nonetheless.

If the bill passes, you may soon need to upgrade the size of your coin purse. Then again, much of our society has already become nearly cashless, so changing the currency may not impact consumers and businesses as much as it would’ve a few decades ago.

Changes to currency are a sign of changing economies, as evidenced by some nations’ removal of the penny from circulation, due to inflation. The current face of global commerce, when paired with the need to tighten the nation’s spending, may work together to create the conditions necessary for a successful dollar coin conversion.

Dollar bill or dollar coin… what do you prefer?

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  • hannah says:

    As a Canadian, the dollar coin isn’t really as big a deal as Americans seem to think it is. I think one reason the US uses dollar bills so much is because they can. If the US largely switched to coins, people would stop carrying around so many dollars because of the weight. So you see it just requires a shift in thinking, instead of reinforcing your pocket.

  • Grinch says:

    The treasury has tried for years to make $1 coins popular with consumers. The coin was even changed to a US president each year, (to encourage collectors) but those have been made in less and less quantities each year, and now huge amounts are stowed in treasury vaults throughout the country. This is just the newest plan to initiate the change to coin dollars. As a side note, I used Sacajawean dollars when I taught Dave’s Generation Change class. It was especially useful for the muddy dollar lesson. At graduation, I gave each student a grad certificate and a Sacajawean dollar to begin their savings account.

  • fredjohnson says:

    I don’t like the dollar coins. Who wants to carry even more weight in their pockets when hauling around the change the cashier gives you? Whenever I go to Canada I am always reminded what a huge pain it is to have all these dumb loonies and whatever in my pockets. Keep the paper. If we do anything, let’s go to a completely cashless society.

  • Ruth Cooke says:

    As a Canadian, the love that Americans have for paper currency that all looks pretty much the same at first glance is somewhat confusing to me. I like the fact that I can tell a five from a twenty without having to scrutinze the actual bill–colour coding is the key.

    Our vending machine operators (who are small business owners themselves) are more than happy with our “loonies” and “toonies,” and those who operate south of the border wish the US would get with the program!

    As for carrying tons of coins, it doesn’t really happen that way. The quarters, dimes and nickels (no more pennies, yay!) tend to outmass the one and two dollar coins I have, as I tend to spend those in place of bills if I have more than five dollars worth.

  • Christine says:

    I’m all for the switch to dollar coins! I spent a month in Italy several years ago and spent lots of time with 1 and 2 Euro coins in my pocket. I have to say I much preferred it to dollar bills and the “bulk” factor really isn’t that big of a deal. Carry five one dollar bills in your pocket isn’t really any more convenient that carrying 5 1$ coins.

  • We have $1 coins in Grenada, well really they are 1ECD, but we use them all the time. They are really convenient!

  • Rose says:

    Coins can still be rejected at vending machines 😉
    As a European it seems crazy to me that you would have a note for $1, or even $2! And coins don’t weigh all that much – especially if you give the cashier all the change you have regularly.

  • Amber says:

    We’re just used to bills, that’s why we think they’re better. Sure a coin weighs more, but it’s petty awesome to empty your pockets or purse and find you’ve got $10 in change. No more bills rejected at vending machines is definitely a positive. Anyone who’s traveled to Canada, Australia or Europe would probably say it’s not a big deal to switch. Now, let’s get rid of the penny too.

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