While many other global economies — including the European Union — have ditched their low-value paper banknotes in favor of coins, the U.S. continues to churn out dollar notes while $1 coins take a backseat. But a new report by the Government Accountability Office urges the Treasury and the Federal Reserve to give renewed thought to the idea of making dollar bills extinct.
The GAO, which has made this suggestion before, crunched some numbers and calculates that replacing the $1 note with a $1 coin could save the government approximately $5.5 billion over 30 years.
The change to coins would, however, would mean that the government would incur a net loss in the first 4 years while the transition occurs, mostly due to up-front costs of ramping up coin production at the Mint.
As for the previous and ongoing attempts to introduce $1 coins, the GAO attributes the failure for coins to catch on to the simple fact that paper money still remains on the market.
“Other countries that have replaced a low-denomination note with a coin, such as Canada and the United Kingdom, stopped producing the note,” reads the report. “Officials from both countries told GAO that this step was essential to the success of their transition and that, with no alternative to the note, public resistance dissipated within a few years.”
Can you imagine an America without dollar bills?