Replacing the U.S. Dollar Bill with a Coin – An International Perspective

Even U.S. government studies confirm that it would be more cost effective to cease issuing $1 paper currency and only issuing coins of that denomination. However, as I have explained in the past, there are political considerations that, so far, carry more weight than the economic benefits of making such a change.

Another political obstacle to retiring the $1 bill and replacing it only with coins is that would symbolize the falling purchasing power of the U.S. dollar. Even though this is true, no politician would want to blatantly advertise this fact with a sudden replacement of currency with coins of the same denomination.

The $1 Federal Reserve Note is the lowest currency denomination issued by the U.S. government. As the U.S. dollar has been the effective world reserve currency since the end of World War II, it is not surprising that the lowest denomination notes issued in other countries have value somewhere along the lines of the U.S. bill.

Following is the exchange rate in U.S. dollars of the lowest denomination currencies in circulation in many of the world’s nations, as of the afternoon of July 27.

In some of these countries, the governments also issue coins with the same value as their lowest-value currencies.

As you can see, the U.S. $1 bill would rank tied for 30th out of the 55 currencies listed. In a world that is trying to line up currencies with America, that would be about where you would expect it to land.

Some nations with low purchasing power currencies have even smaller denominations that could still circulate, but they are no longer in production, victimized by high rates of inflation of the money supply.

Note that countries using the dollar for their denominations have an average higher value than other currencies.

Most of the world’s larger economies have a lowest-currency denomination valued higher than the U.S. dollar – up to more than 10 times as high! This may be the strongest argument for retiring the U.S. $1 Federal Reserve Note and using only $1 coins in this country.

Patrick A. Heller was honored as a 2019 FUN Numismatic Ambassador. He is also the recipient of the American Numismatic Association 2018 Glenn Smedley Memorial Service Award, 2017 Exemplary Service Award, 2012 Harry Forman National Dealer of the Year Award and 2008 Presidential Award. Over the years, he has also been honored by the Numismatic Literary Guild (including in 2021 for Best Investment Newsletter), Professional Numismatists Guild, Industry Council for Tangible Assets and the Michigan State Numismatic Society. He is the communications officer of Liberty Coin Service in Lansing, Mich., and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at www.libertycoinservice.com. Some of his radio commentaries titled “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 a.m. Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio archives posted at www.1320wils.com).