By Richard Giedroyc
“It seems the time has come to follow the lead of other governments and consign them to history,” the “them” being coins, according to an Oct. 12 South China Morning Post newspaper editorial.
This is not the sort of thing a coin collector or hard money advocate wants to read. Are coins truly a relic out of our economic barbaric past, or is it Hong Kong that stands alone by considering relegating circulating coins to the dust bin of history?
The newspaper has some interesting arguments suggesting coins are becoming increasingly redundant.
According to the newspaper, “Buses, trams and convenience stores are among the few places that accept 10-, 20-, and 50-cent coins. Many shops and market stall holders sell goods in whole dollars, finding small change inconvenient and even a nuisance. The face value of the two smallest coins [10- and 20-cent coins] is less than the cost of making them.”
The article points out that Australia, Canada, New Zealand, and Norway have in recent years phased out their lowest denomination coins, however the article fails to point out that higher denomination coins that are replacing bank notes of the same values have been added to the mix. The Hong Kong newspaper also fails to point out that merchants are likely rounded up prices by doing away with small change.
Hong Kong’s monetary authority recently arranged for a contractor to collect hoarded coins in return for bank notes or for Octopus debit card value. The newspaper described the results as having “surprised the contractor, which had expected at most small tins would be involved. Instead, people have been bringing in hundreds, sometimes thousands of dollars, in loose change. That our economy has got by for so long without them in circulation says much about how much they were missed.”
The South China Morning Post article is in stark contrast to an Oct. 25 Al-Madinah article. The Saudi Arabian newspaper states: “As a result of the sudden increase in demand for coins, a black market has suddenly emerged where Asian expatriates sell three ryals worth of coins for five ryals to drivers desperate enough to pay the extra two ryals.”
The Oct. 25 Saudi Gazette (“however”) explains this demand for coins. “Many drivers have openly criticized the fact the parking meters do not accept paper money or credit cards and have asked the municipality to upgrade the system.”
According to the gazette, “When the automated payment system for parking was installed in downtown Jeddah by the municipality, drivers were told they would have to pay three ryals for every hour they parked their cars in the area. What drivers, however, were not told was that the system only accepts coins, which are hard to find in a country where grocery stores often substitute packs of gum for exact change.”
So, a Hong Kong newspaper says local citizens would rather use an Octopus card than small change, while two Saudi Arabian newspapers observe merchants struggling to find small change, but doesn’t suggest substituting something other than coins for that small change.
The municipality of Jeddah had not yet responded at the time this article was being written to local requests for an upgrade to the parking meters allowing credit cards to be used. If coins are so inconvenient, as the Hong Kong newspaper suggests, why the hesitation in Jeddah?
While two trucks in Hong Kong are accumulating what is described as “hundreds of kilograms of coins” to clear them from hoards Saudi Arabia is scrambling to find more coins. Who is right? Likely both of them. Each society is different, some requiring a different form of currency than does another. Why doesn’t the U.S. dump its lowest denomination coins, while issuing coins of yet higher denominations? Each is different.
Conclude what you want, but it appears for now coins are here to stay—in some countries.
This article was originally printed in World Coin News.
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