The Krause Publications 2013 Coin of the Year Award was won by the Royal Dutch Mint for a 5-euro silver coin that is scannable.
Imagine combining the ancient technology of coinage with the modern technology of the debit or credit card.
Imagine the possibilities.
Some people don’t like modern coinage because it tends not to be made of precious metal and is therefore very susceptible to the erosion of its purchasing power through inflation.
What if you created coins with a scannable value that would rise as the cost of living rises?
We already have Forever stamps at the U.S. Postal Service that will always be worth the price of mailing a first class letter.
What if we had a dollar coin that would always have the purchasing power of a dollar?
If this year saw 3 percent inflation, then next year it would scan at $1.03. If we had another 5 percent inflation in the year after that, the next adjustment would take the scannable value to $1.08.
This is easily done.
The only question would be how many decimal places should be used. Because figuring inflation at 3 percent followed by 5 percent would actually yield a two-year value of $1.0815. With electronics, you don’t necessarily have to consider making change. You would simply accumulate 100 coins in order to get a fully exchangeable amount of $108.15.
With such an inflation adjustment mechanism, people would probably seek out dollar coins instead of avoiding them like the plague.
They would probably want to squirrel them away rather than spend them because their purchasing power would be preserved over time. That would make the coins handy as a rainy day fund. You could have the convenience of cash and none of the cost of inflation.
But we shouldn’t forget that we want dollar coins to be used.
With all the scanning equipment retail businesses currently need, it wouldn’t be much of a stretch to add a coin counter that would scan the changing values of scannable dollar coins. It is hardly a major leap from where we are now with current coin counting machines in stores.
That would make them easy to spend at their higher values.
Suddenly, precious metals would have competition in the important store of value function.
It is not exactly turning base metal into gold as the alchemists of old attempted. The coins would still be base metal.
However, scannable coins would protect the owners from inflation without all the muss, fuss and bother of obtaining gold and silver bullion coins.
This quality would turn dollar coins into winners instead of losers.
Buzz blogger Dave Harper is editor of the weekly newspaper “Numismatic News.”