Nickel-plated zinc in our coin future?

Image courtesy http://jardenzinc.com.

Whether the United States ever changes the composition of its nickel, dime, quarter and half dollar is something that none of us can know.

If it does, one of the leading candidates to serve as the new composition is nickel-plated zinc.

Such a composition would have the color and look of the coins it is replacing, though such coins would be lighter.

I had to go all the way to Berlin, Germany, to think about this. I attended a technical forum at the World Money Fair.

An enormous ballroom was filled with the best technical minds the mints of the world have to offer.

One of the presentations was given by the Singapore Mint. Various alternative coin compositions were tested by this respected institution.

Naturally, it was constructed as an evaluation of alternatives to some of the euro system coins.

But the lesson could not be clearer. Nickel-plated zinc was the best choice. It was the best of all the compositions tested.

Every participant at the forum had been given a Year of the Rooster medallion made of nickel-plated zinc.

It has a fairly high relief. Coins struck this way would look like the coins we are used to and not some shallow laser-etched substitute.

But no matter what the technicians tell us, it is the vending machine industry that plays the music that the circulating coin economy dances to.

Nickel-plated zinc would have a electromagnetic signature that is different from the copper-nickel of any U.S. coins it replaces. Combined with lighter weight, this means such coins cannot circulate side by side in vending machines as the copper-nickel coins did for a time with the silver coins they replaced in the 1960s.

Is that a problem? Yes. Is it a deal breaker? Probably, but prices of copper and nickel will have a lot to say in a decision-making process in the future.

Jarden Zinc Products, a firm that supplies copper-plated zinc blanks to the U.S. Mint joined the Singapore Mint as a sponsor of the Year of the Rooster medallion.

Obviously, its economic interests clash with that of the vending machine industry. But it has a product that looks superior.

The question is, since silver coins were virtually entirely withdrawn in the United States within three years in the 1960s, this historical anecdote might prove that a big bang approach of introducing one and withdrawing the other could work, just as the euro countries did it in 2002.

The U.S. Mint has excess capacity, unlike the situation in the 1960s. A program of striking an entirely new coinage would use it. It would create employment.

Should such a discussion of this possibility ever be made, you can be sure there will be strong opinions on both sides.

Collectors will also weigh in. Circulation finds would take a hit.