Mail Bag – Will We Ever Use a Dollar Coin?

Today’s Mail Bag question comes from Chris who asks a question a lot of us have asked over the years. Will we here in the United States ever adopt a Dollar coin to replace the Dollar bill? It is a question that has come up time and time again over the course of the past several decades and there is no simple answer.

Hi,

You write a lot about the dollar coins that the mint makes each year. Why do we not see these in circulation? Will we ever see a coin replace the dollar bill? It seems to me that if we are producing them, why not use them?

Thanks,

Chris

Let’s unpack your questions here Chris because there is a lot to it. First, I agree. We are producing a small number of dollar coins (Native American, American Innovation, and likely this year a new Presidential Dollar) but only the Presidential dollar in the past decade has been released for circulation. The Native American and American Innovation coins are produced for Numismatic products only in effect. So why produce them? Well, to be honest, the Mint makes money selling… money. We collectors pay money for money so they have embraced that and effectively produce coins just for us. That’s not the entire story but it is close to it.

The bigger issues with a circulating dollar coin come down to two key things in my opinion (note, this is my opinion – you may agree or disagree). First, the American public somewhat has tired head over Dollar coins. Think about it: Since 1979, we’ve had three circulating Dollar coin changes – Susan B. Anthony, Native American, and Presidential Dollar. None of these ever captured popular interest in some part because it is sometimes hard to spend a dollar coin. Many vending machines for example still don’t take them. Merchants don’t like them because there isn’t a place in their cash till for them. In other words, our economy isn’t really setup for coin version of a Dollar.

Couple this with my second point: Our economy is changing. We simply do not carry and spend cash as we did even a decade ago. Many of us use credit or debit cards but even those are going away. I use Google Pay a lot (especially on the road as I travel a lot for business) because it is quick and secure. I’m not suggesting we will be completely cashless in the future but we will certainly see a smaller percentage of cash versus electronic spending over the course of the next 5-10 years. That, in turn, gives the Mint and Congress little incentive to actually go circulate a coin.

Third, to do this would require Congress and the banks to cooperate. In order for a coin to replace the bill, Congress would first have to pass a law and the President would have to sign it. That isn’t a big deal really as we’ve done that plenty over the past few decades. But in order for a true replacement to happen, the law would have to stipulate that the Dollar Bill becomes non-legal tender at a certain point. Let’s call it 2 years. That means that banking institutions would have to collect all of the bills within that window, return them to the Federal Reserve in order to get a dollar coin for them. That’s something that is unlikely to happen on both parts of the equation.

Finally, there is a bit of nationalism here in the United States tied to the One Dollar Bill. The “Greenback” is known throughout the world as a standard for currency. This is so much so that Congress has been hesitant to even change the color or the composition of the bill to prevent counterfeiting and making the bill more durable. Canada, Australia and the European Union have all moved to plastic bills which last an incredibly long time. But the idea of doing that here in the U.S. is just a bridge to far for many in Congress. And, let’s be honest, we have more pressing issues to deal with nationally right now.

So there you go Chris. A simple and great question but a complicated answer that I personally don’t see changing any time soon. Believe me, as a collector, I would love for us adopt a $1 Coin!

Thanks for writing in!