According to an NPR story this week, the Federal Reserve is sitting on a billion dollars worth of the $1 Sacagawean and Presidential coins, and the program to replace dollar bills with the metal coins has largely been deemed a failure. The government spends millions annually to mint new coins in order to introduce all the US presidents, resulting in millions languishing in vaults a la “Scrooge McDuck” said Planet Money’s David Kestenbaum. Despite the fact that they are legal tender and the government’s many efforts to promote their use, Americans still distrust the dollar coin.
Why the reason for the distrust? Americans claim they are difficult to spend, not recognized by many merchants, or just weigh down pockets too much. Perhaps we should ask our foreign neighbors how they have integrated them into daily life. America is one of the few countries in the developed world to use a $1 banknote and the only one of the top five traded currencies (including the Euro, British Pound, Japanese Yen, and Australian dollars) to use a bill in such a small denomination. Canada replaced the dollar bill with the “loonie” coin in 1987 and the British pound note has been out of circulation since 1983. Is taking away the $1 bill the only way to get Americans to use the coin? We reported earlier this year on a possible way to earn frequent flyer miles by purchasing dollar coins, a legal (but not encouraged by the US Mint) practice that may actually contribute to this back log of currency. Maybe go out and spend the coins instead and hope the trend catches on.