Coin Production Costs May Help Push U.S. to Cashless Society
It now costs more money to make a penny and a nickel than the coins are actually worth, according to a new report from the U.S. Government Accountability Office. Since 2006, the U.S. Mint has been losing money producing pennies and nickels, due to rising metal prices throughout the country.
A single penny now costs 1.7 cents to produce, while a nickel costs 8 cents. Logically, the way to solve this issue is for the U.S. Mint to utilize cheaper metals, but they have not been able to identify anything cheaper than zinc. Every penny is made up of 97.5% zinc.
Yet another option for alleviating some of the costs of coin production would be to produce new coins to hold the same value. The drawback to this idea is that businesses, banks, and even vending machines would have to be reconfigured to accommodate the new coin.
The silver lining in this is that America is already moving to a cashless society. The convenience of debit and credit cards have practically eliminated the need for cash and checks in today’s world, and the emergence of mobile wallets lowers the demand for tangible currency even further.