How Long Until People Don't Use Coins Anymore?

This fear that eliminating small coins and conversely introducing larger value banknotes will increase inflation is very common around the world. Personally, I find it ridiculous, but it is very common. I think inflation is the cause of the changes in money denominations.

There was massive paranoia that the changeover to the Euro would be used to hide price increases. As a result a law was introduced over much of Europe that the prices had to be identical after the conversion.

The result in Spain was comical as 1000 Spanish pesetas converted at 166.386 peseta/Euro resulted in exactly 6.01 Euros. So while groceries are often priced at unusual rates, admissions to movies, museums and buses tend to be round numbers. So if a museum was formerly 1000 pesetas, it was now 6.01 Euros. As it was illegal to round off, people had to reach in their pockets and produce the extra Euro cent.

I disagree with this premise as it applies to coins.

To me, pennies nickels and dimes are all essentially worthless in the sense you are describing, because I cannot think of a single thing I buy that costs a penny, nickel or dime (PacoMartin's comment that it is inflation that determines logical denominations, and not vice versa). I can't buy a candy bar, a pack of gum, a piece of fruit, a can of soda, or anything else I can think of (with a quarter, however, I can buy 15 or 20 minutes on a parking meter, so quarters do have an inherent purchasing utility, though most meters now accept plastic, too). As mentioned earlier by other posters, pennies, nickels and dimes are largely used to make change on uneven transaction amounts. So I do not possibly see how getting rid of the penny makes a nickel seem less valuable. They both have the same utility: making change, not buying anything.

The $1 vs $50 argument is different, as this gets into denominations that can actually purchase things. I expect the experiments have been done to test that hypothesis.

Individual opinions don't drive human nature or the biggest market in the world. It has nothing to do with whether or not a single coin can buy something.

Maybe this is splitting hairs, but it was the UK decimal half penny that was the equivalent of the U.S. cent at the time of decimalization. And it was phased out and demonetized in 1984.

The Lincoln Cent was introduced in 1909 and an item bought for 1 cent in 1909 would be over 25 cents today. I realize that is a pretty good argument for eliminating both the penny and the nickel. However,

the Swiss have a 5 centimes coin Diameter = 17.15 mm weighing 1.8 grams of
Aluminum bronze(92% Cu, 6% Al, 2% Ni but NO Zinc)

which is slightly smaller than

the Lincoln Cent Diameter = 19.05 mm weighing 2.5 grams of
Copper-plated zinc (97.5% Zn, 2.5% Cu)

I think everyone knows that Switzerland is the most cash intensive society on earth, with a $5 equivalent coin and fairly wide circulation of the $1000 equivalent banknote.I would be shocked if the USA abolished minting new 5-cent pieces before Switzerland.

On March 25, 2009, the Swedish central bank formally decided to enact the law to repeal 50-öre coins (5-cent equivalent) as legal tender. Under that law, the final date payments could be made with 50-öre coins was September 30, 2010. Remaining 50-öre coins could be exchanged at banks until the end of March 2011. But AFAIK they are the only country to formally demonetize 5-cent equivalent.

The USA cannot demonetize, they can only stop minting. However, the public's capacity to shove billions of coins into bottles should not be minimized.

I was curious about that comment "...cannot demonetize."

Is that true?

That's part of it, but it's not like Japan is a third world country. As you said below "If the lowest denomination were to become a dollar, prices and any prices changes may be more likely to be in whole dollars but that would be just looking at it in nominal terms."

When you start cutting away denominations you end up just making things bigger and bigger and eventually looking at money just like the 1000 yen.




Yes. Basically you have until x to cash these in for something else and the government does have to compensate for it which is also often ignored.