May 26, 1999
While the U. S. Congress continues to argue and never quite reaches an agreement regarding whether or not the dollar bill should be replaced by a coin, other countries simply "do it."
Chile, Cuba, Haiti, Lithuania, Mozambique and the Solomon Islands are some of the more recent countries to join the growing trend of high-denomination coins replacing low-denomination bank notes in circulation in late 1998 or early 1999. The United States made a feeble attempt in 1979 by issuing the Susan B. Anthony dollar coin, but failed to withdraw the dollar bill at the same time. Since the SBA dollar was about the same size and surface color as the quarter dollar coin, it was not popular and, due to rampant inflation of the time, was dubbed the "Jimmy Carter penny."
At this point the United States stands alone as the only major world nation not to have recently replaced its lowest denomination bank note with a coin. This trend isn't simply fashionable. It makes economic sense. A coin will circulate for somewhere between 20 and 40 years, while a low-denomination bank note has a life expectancy of perhaps a year to 18 months. It costs about the same to produce either currency product.
Adding insult to injury, the United States is just now beginning to overhaul its outmoded paper currency while other nations typically change theirs about every seven years as a precaution against counterfeiting. So, while the United States is introducing 30-year-old technology, the counterfeiters are already busy at work copying our new notes.
Australia and Switzerland are on the cutting edge of technology when it comes to "paper" money. In recent years these two nations have introduced holograms, windowed security strips, polymer (plastic) to replace paper and more. Australia is now exporting their technology by producing polymer notes for other countries.
The concept of high-denomination coins for circulation is nothing new, but in a day and age of vending machines it becomes more economically important to strike such coins. The vending industry lobby has pushed for coins to replace bank notes in some countries.
Some of the nations producing these higher value coins have taken few precautions. However, a significant number of these new denominations are struck with security features to avoid the counterfeiting problems which face paper money.
Many of these new coins are struck on ringed bi-metal blanks. Monnaie de Paris in France has struck ringed tri-metal coins for both France and Monaco. The Royal Canadian Mint has struck patterns on ringed tri-metal blanks, but nothing yet for circulation. Even more advanced technology is on the horizon as mints continue to explore other advanced security options for coins.
The privately-owned Pobjoy Mint led the way in holographic technology for coins. The same concept has since been used on coins of Spain, Great Britain and elsewhere. It can be expected there will be further use of such devices is expected as higher denomination coins proliferate.
The coin replacing a low-denomination bank note may appear to be a modern idea, but in fact it isn't. Taking the United States as an example, prior to 1933 gold coins in denominations as high as $20 circulated. Today the highest denomination coin struck in this country is a dollar. At this time it is only a silver bullion coin (American Eagle), not a circulation strike.
In 1987 Canada replaced its bulky pure nickel composition dollar coin with a smaller and distinctly yellow aureate-nickel dollar to ensure it would circulate. Production of the Canadian dollar bill soon followed, ensuring the success of the coin. Canada has since replaced the $2 bill with a ringed bi-metal coin.
Great Britain, France, Australia, New Zealand and many other countries have done the same. Switzerland has been minting and circulating a silver dollar size 5-franc coin (face value of about $3.60) since the 19th century. The sight-impaired, the vending industry, the general public and yes, the coin collector, all benefit from these new coins. We can expect many more of them in the future, maybe even in the United States at some point.
Richard Giedroyc is a numismatic writer, researcher, auction cataloger and coin dealer. He has been in the hobby and business most of his life, now having more than three decades’ experience in this fascinating hobby field. During this time Giedroyc has been the owner of Paris Bergman Galleries, owner of Classical Coin Newsletter, international editor of Coin World and owner of Giedroyc-Anderson Interesting World Coins. He is currently a numismatic consultant. He has written more than 2,000 byline numismatic stories and contributed to several coin catalogs.