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Centless future?

Canada will abolish its cent this year. The last coins will come off the Royal Canadian Mint presses in the autumn it has announced.

Canadians will have to get used to a system of rounding in their cash transactions that will be employed when the coins disappear from circulation.

Amounts that end in 1 cent or 2 cents will be rounded down. Amounts that end in 3 cents or 4 cents will be rounded up to the next 5 cents.

Payments by check, credit or debit card can be to the penny.

The United States could ask for no better timing for this change.

The U.S. Mint must submit a report to Congress on the future of American coinage early next year. Just like Canada, our cent costs more to make than its face value and our nickel, too.

Will the American Congress look north to assess the Canadian experience to make a judgment based on flinty-eyed cost analysis as the Canadian federal Parliament is about to do?

For the Canadians, the 1.6 cent cost of each cent is too much.

In the United States, the cost of the cent already has ballooned to 2.41 cents each.

Our nickel costs 11.18 cents.

If the past is any guide, there is no reason to assume that the United States will follow the Canadian example.

In 1987 Canada abolished the paper dollar and introduced a new circulating $1 coin.

The United States did not.

In 1996 Canada abolished the $2 bill and introduced a $2 coin.

The United States did not.

Now Canada is about to act on the issue of the 1 cent coin.

What will the United States do?

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2 Responses to Centless future?

  1. Romarq says:

    Good Morning Dave,

    I fully agree with the Canadian Mint on their abolishing the cent. Having spent a lot of business time in Canada before retiring, I find the Canadian people to be most adaptive. They will handle this as well as they handled the loss of the paper one and two dollar bill.

    I have a suggestion for the U.S. Mint: Drop the cent and the five cent piece entirely and re-introduce the 3 cent piece a bit smaller or a bit larger than the existing cent. (using the same metal as today’s cent) The seniorage from manufacture would no longer be in the minus column that way. In that instance the worst case scenario would be the loss or gain of “one cent ” in rounding up or down. Seeing most people throw pennies a in a jar anyway, it is hard to believe the loss or gain of a cent will make or ruin anyone’s day.

    Just a thought by a long time coin collector.
    Roy

  2. J902 says:

    As a numismatist who reports on news in the numismatic world it would be a refreshing change to see proper terminology used rather than colloquial terms. A penny is two cents and is British. The only country in the world to make nickles, dimes, quarters or half dollars is The United States of America. Their money actually has those names on them. Canadian currency does not. Just because the majority of the Canadian populous has been heavily Americanized does not mean someone in your position should too.

    That’s my penny at least, (again, penny = 2 cents, get it?)

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