My idea for US currency reform

[SEWIGuy]

Let's end this discussion and go back to a previous one. mgk920 mentioned a $5 coin. I believe the only countries that have one are Switzerland (5 francs) and Japan (500 yen), and the latter is closer to $4 after a change in exchange rate. Countries with dollars weaker than ours, like Canada, Australia, and New Zealand, do not have anything labeled $5. (I believe Singapore does, but I'm not sure if it's in common use.)

While I'm not entirely opposed to the idea myself, we would definitely be leading rather than following if we introduced a $5 coin.

It would be re-introducing a coin that actually has a significant amount of purchasing power; 50¢ in 1965 had the same purchasing power as $5 today.

That is really a poor justification considering how people utilize coins and paper money compared to 1965. Furthermore, and this was said way upthread, but do we really want to sub out paper bills for coins? I can see the $1. But the $5?

[Molandfreak]

Let's end this discussion and go back to a previous one. mgk920 mentioned a $5 coin. I believe the only countries that have one are Switzerland (5 francs) and Japan (500 yen), and the latter is closer to $4 after a change in exchange rate. Countries with dollars weaker than ours, like Canada, Australia, and New Zealand, do not have anything labeled $5. (I believe Singapore does, but I'm not sure if it's in common use.)

While I'm not entirely opposed to the idea myself, we would definitely be leading rather than following if we introduced a $5 coin.

It would be re-introducing a coin that actually has a significant amount of purchasing power; 50¢ in 1965 had the same purchasing power as $5 today.

That is really a poor justification considering how people utilize coins and paper money compared to 1965. Furthermore, and this was said way upthread, but do we really want to sub out paper bills for coins? I can see the $1. But the $5?

I'm just saying I might be inclined to keep a few more coins in my pocket if I didn't need 10 of them to purchase literally anything.

[thenetwork]

I saw a news story about 15 years ago where the US Mints were required to create a certain amount of $1.00 Presidental-themed Coins -- similar to when they created a certain amount of State-themed Quarters.

Like the state coins, they minted x-amount of dollar coins for each president's likeness and had coins for each president up to that point.

The story made light that most, if not all of these gold-colored coins are still sitting in vaults collecting dust, because there is/was no mandate to get them out into circulation.

So as far as I know, we have millions of uncirculated dollar coins that could replace the paper notes overnight, but no one in the government is in any hurry to use them as a start to officially phase out the $1.00 bills.

You can thank retailers for that, because of the logistics they would have to incur to convert their cash register tills, and vending/change-making machines.

[kalvado]

I saw a news story about 15 years ago where the US Mints were required to create a certain amount of $1.00 Presidental-themed Coins -- similar to when they created a certain amount of State-themed Quarters.

Like the state coins, they minted x-amount of dollar coins for each president's likeness and had coins for each president up to that point.

The story made light that most, if not all of these gold-colored coins are still sitting in vaults collecting dust, because there is/was no mandate to get them out into circulation.

So as far as I know, we have millions of uncirculated dollar coins that could replace the paper notes overnight, but no one in the government is in any hurry to use them as a start to officially phase out the $1.00 bills.

You can thank retailers for that, because of the logistics they would have to incur to convert their cash register tills, and vending/change-making machines.

Vending and change making machines are probably the only places where I saw $1 coins.

[thenetwork]

^^ But only the most modern equipment are equipped to accept and distribute dollar coins as change.  Converting some of the older machines or purchasing new machines is cost prohibitive for many businesses.

[kalvado]

^^ But only the most modern equipment are equipped to accept and distribute dollar coins as change.  Converting some of the older machines or purchasing new machines is cost prohibitive for many businesses.

Given that the big drive for dollar coins was something like 15 years ago, "newest" isn't the best word to use ..

[1995hoo]

^^ But only the most modern equipment are equipped to accept and distribute dollar coins as change.  Converting some of the older machines or purchasing new machines is cost prohibitive for many businesses.

Given that the big drive for dollar coins was something like 15 years ago, "newest" isn't the best word to use ..

I believe it was closer to 25 years ago. Scary to realize that, but 2000 was 25 years ago.

[Scott5114]

I don't think we need a $2 anything. $1 and $5, whether a bill or coin, is fine.

Try having a large quantity of $2s on you sometime. The convenience is significant—you never need more than a single $1 in any transaction. And likewise you never need more than two $2s. The efficiency is fantastic.

[Rothman]

I don't think we need a $2 anything. $1 and $5, whether a bill or coin, is fine.

Try having a large quantity of $2s on you sometime. The convenience is significant—you never need more than a single $1 in any transaction. And likewise you never need more than two $2s. The efficiency is fantastic.

...or just use a credit card and not have to worry about cash all that often...

[Scott5114]

I don't think we need a $2 anything. $1 and $5, whether a bill or coin, is fine.

Try having a large quantity of $2s on you sometime. The convenience is significant—you never need more than a single $1 in any transaction. And likewise you never need more than two $2s. The efficiency is fantastic.

...or just use a credit card and not have to worry about cash all that often...

That's just boring, though.

[MikeTheActuary]

I don't think we need a $2 anything. $1 and $5, whether a bill or coin, is fine.

Try having a large quantity of $2s on you sometime. The convenience is significant—you never need more than a single $1 in any transaction. And likewise you never need more than two $2s. The efficiency is fantastic.

The challenge, of course, is getting them.

I generally ask for them on those rare occasions when I physically go into a bank branch.

[GaryV]

You can thank retailers for that, because of the logistics they would have to incur to convert their cash register tills

Get rid of pennies, and a till spot opens up for dollar coins. Done.

[kphoger]

Trying to figure how eliminating pennies and nickels but keeping dimes and quarters would make change easier. The one hole in that theory is if you get 5¢ or 15¢ back in change, that would mean either you or the store are getting shorted. Every other combination involving a 5 or 0 would be covered.

I had not considered this.  As a thought experiment, if we got rid of pennies and nickels, then...

If an item is priced at $4.96 and I pay with a $5 bill, then the change theoretically due me would be 4¢.  But the argument is simply that 4¢ rounds down to zero, and I shouldn't be due any change.  This sounds like it should all work out fine in the wash, with half the transactions rounding up and other half rounding down.

However, if I pay for that same item with a $10 bill, then the change theoretically due me would be $5.04 instead.  At first glance, you might think it makes sense to get an even $5 back as change.  But I'd insist to be paid with $4 of whatever denomination, then three quarters and three dimes:  $5.05 back as change instead of $5.00 even.

[kphoger]

May I ask how many people here have a coin compartment in the wallet or otherwise have significant number of coins on them on a regular basis?

I do have some coins in the car for a few parking meters which still take coins and may grab some if going to the dollar store, but otherwise it may be a stray coin or two in a pocket, if that

I keep a few coins in the car.  At least a quarter, to get the shopping cart at Aldi, plus random other coins to use for parking meters or whatever.  Also so that, if I really need a caffeinated soda to wake me up at work, I can scrounge enough change to feed the vending machine.

As for coins in my pocket, I definitely grab a bunch any time I need to take the bus somewhere.  But otherwise I don't carry any.

However, anecdotally...  In Mexico, the lowest paper denomination is 20 MXN (equivalent to 1 USD).  However, there is also a 10 MXN coin that is much more widely circulated than the US half-dollar.  I find it more convenient, not less, to use all coins for a small purchase such as a bottle of soda at the gas station.  Rather than pull out both my wallet and some coins from my pocket, I'd rather just grab the coins from my pocket and use that.  That is to say, I find Mexico's equivalent of two half-dollar coins to be more convenient than Mexico's equivalent of a dollar bill.  20 MXN coins (equivalent to US dollar coins) are more rarely encountered, but I have certainly found them convenient for the same reason:  just pull the coins out of my pocket and use that, no wallet fiddling required.  Theoretically, there are also 50 MXN and 100 MXN coins (2.50 USD and 5 USD) in circulation, but I doubt I'll ever see any of them in real life.

[mgk920]

Let's end this discussion and go back to a previous one. mgk920 mentioned a $5 coin. I believe the only countries that have one are Switzerland (5 francs) and Japan (500 yen), and the latter is closer to $4 after a change in exchange rate. Countries with dollars weaker than ours, like Canada, Australia, and New Zealand, do not have anything labeled $5. (I believe Singapore does, but I'm not sure if it's in common use.)

While I'm not entirely opposed to the idea myself, we would definitely be leading rather than following if we introduced a $5 coin.

May I ask how many people here have a coin compartment in the wallet or otherwise have significant number of coins on them on a regular basis?
I do have some coins in the car for a few parking meters which still take coins and may grab some if going to the dollar store, but otherwise it may be a stray coin or two in a pocket, if that
I don't think introducing coins would go nicely with most people. Moreso if those are higher value ones.

I would offer the following slate:

Coins-

- 25¢
- $1
- $2
- $5

banknotes-

- $10
- $20
- $50
( up )

Mike

[mgk920]

I don't think we need a $2 anything. $1 and $5, whether a bill or coin, is fine.

Try having a large quantity of $2s on you sometime. The convenience is significant—you never need more than a single $1 in any transaction. And likewise you never need more than two $2s. The efficiency is fantastic.

...or just use a credit card and not have to worry about cash all that often...

No, I'm in no mood to enrich the credit card companies.

Mike

[Rothman]

I don't think we need a $2 anything. $1 and $5, whether a bill or coin, is fine.

Try having a large quantity of $2s on you sometime. The convenience is significant—you never need more than a single $1 in any transaction. And likewise you never need more than two $2s. The efficiency is fantastic.

...or just use a credit card and not have to worry about cash all that often...

No, I'm in no mood to enrich the credit card companies.

Mike

All banking incurs costs...

[wxfree]

Pennies can go.  As much as I hate change (and I don't mean coins), I made peace with this when I realized that pennies are treated as garbage.  I stopped picking them up years ago.  There are billions of pennies out there, so there doesn't need to be a shortage of them.  However, they're of so little value, people throw them in buckets rather than carry them around, so they'd probably dry up quickly.  I would dump mine at the bank after keeping a few as mementos.

Prices don't need to change.  Even if the minimum denomination is 5 cents, that applies only to the sales total, not to each individual item.  Walmart can still charge $4.83 and everyone else can charge $4.99, and once sales taxes are added it can be rounded to the nearest nickel.  We already round to the penny with sales taxes, and gasoline is actually priced in fractions of a penny.  This rounding would be nothing new.

Nickels can't go yet.  Until we round to a single decimal, and write dollar amounts like $2.4 and round to tenths of dollars, we need a coin for a twentieth of a dollar.  Quarters will have to go when nickels do, because each quarter has a nickel built into it.  I see quarters being replaced with half dollars and dimes being the new pennies, five to make the next higher coin.  Quarters might need to go before the nickels do, so people can trade them in for halvsies before we convert to a single decimal.  We need to have a shortage of quarters before we have a shortage of nickels to make change from them.  I would start withdrawing quarters as they come into banks but keep nickels in circulation since they're still needed.  A pair of either would still be worth an even amount in the new system.  Ten pennies would still be worth ten cents, but they'd go into the odd coin cup and be withdrawn once they get to the bank.

[kphoger]

Until we round to a single decimal, and write dollar amounts like $2.4 and round to tenths of dollars, we need a coin for a twentieth of a dollar.

I don't see why prices couldn't continue to be written as $2.40.

In Mexico, while 5 MXN coins are still technically legal tender, they haven't been minted in more than twenty years, and I'm not sure I've even seen one in real life.  All stores round prices to the nearest 10¢ at the smallest, with many rounding to the nearest 50¢.  Yet cash register prices still ring up to $x.xx with no problem.

[wxfree]

Until we round to a single decimal, and write dollar amounts like $2.4 and round to tenths of dollars, we need a coin for a twentieth of a dollar.

I don't see why prices couldn't continue to be written as $2.40.

In Mexico, while 5 MXN coins are still technically legal tender, they haven't been minted in more than twenty years, and I'm not sure I've even seen one in real life.  All stores round prices to the nearest 10¢ at the smallest, with many rounding to the nearest 50¢.  Yet cash register prices still ring up to $x.xx with no problem.

There's no reason you can't, but there would be no reason to continue to do so.  When I write, or type, $2.40 I put it as $2.4.  I could just as legitimately write it as $2.400000.  People often use two decimals when one is enough, and even when none are needed.  Habits are real, but I don't like to write without intent or follow a habit without thinking.  Really, my point is that transaction amounts would be writable with, even if not written with, a single decimal space.  My bigger point is that nickels are more needed than quarters, even though they're smaller.  We need larger coins to be a value replaceable with smaller coins.  I would withdraw quarters and convert to halvsies (I want to get that term started) at about the same time we stop or slow down production of nickels, but keep nickels going out from banks for a while after that to make change.  At a later point we no longer need a second decimal space, although its use would be just as correct.

If we keep using two spaces, maybe gasoline prices would be set in whole cents, so that even though it would still be an amount for which there are no coins made, it would look like a normal amount when written.

[kphoger]

When I write, or type, $2.40 I put it as $2.4.

$ 2 ²/₅

[kalvado]

I don't think we need a $2 anything. $1 and $5, whether a bill or coin, is fine.

Try having a large quantity of $2s on you sometime. The convenience is significant—you never need more than a single $1 in any transaction. And likewise you never need more than two $2s. The efficiency is fantastic.

...or just use a credit card and not have to worry about cash all that often...

No, I'm in no mood to enrich the credit card companies.

Mike

Armored car companies thank you for your choice!

[thenetwork]

You can thank retailers for that, because of the logistics they would have to incur to convert their cash register tills

Get rid of pennies, and a till spot opens up for dollar coins. Done.

Better yet...rid the pennies "and" the $1.00 bills and have an even LARGER single till to stash dollar coins!!!

[freebrickproductions]

Flood the market with 50 cent pieces, combined with a PR campaign that points out they are not collectable.

TBQH, I wouldn't be too surprised if part of the reason why the half-dollar never took off was because the largest coin (in terms of size, ignoring value) most things like vending machines and parking meters took was, and still is, the quarter.

[Scott5114]

Flood the market with 50 cent pieces, combined with a PR campaign that points out they are not collectable.

TBQH, I wouldn't be too surprised if part of the reason why the half-dollar never took off was because the largest coin (in terms of size, ignoring value) most things like vending machines and parking meters took was, and still is, the quarter.

It actually did take off, though. It was widely circulated until the 1960s.

What caused it to disappear was that it was the last coin to have the silver content removed from it, combined with it having Kennedy's face put on it soon after his death (before that it had Ben Franklin on it). Both of those caused people to remove them from circulation en masse, and by the time the Mint caught back up everyone was used to just using two quarters for everything.

Half-dollars are still widely circulated in Las Vegas, where they're used for blackjack payouts (a proper 3:2  payout for a blackjack on a $5 bet is $7.50). In other states, they use 50¢ chips, but Vegas figured out it was cheaper to just use the already-existing coins.