Goodbye US dollar banknote? Government report urges move to coin only

The US Government Accountability Office says it's time to phase out the US $1 note and use coins only. The rise of digital money would help make this a very easy transition.
Written by Joe McKendrick, Contributing Writer

European Union members no longer have it, the British no longer have it, and the Canadians no longer have it.

None of these nations have the single unit of their currency available on a paper bill -- it's in coin form only.  There's no longer such a thing as a 1 euro,  1 British pound, or 1 Canadian dollar banknote.  Why?  It saves their governments a lot of money.

Now, the US Government Accountability Office says it's time to phase out the paper version of the US $1 note. According to GAO’s analysis, "replacing the $1 note with a $1 coin could save the government approximately $5.5 billion over 30 years. This would amount to an average yearly discounted net benefit—that is, the present value of future net benefits—of about $184 million."  The savings comes from the fact that coins last much longer than paper currency. (Full report here.)

GAO says the transition would cost the government the first four years due to the need for the US Mint to crank out enough dollar coins to meet demand. Plus, some businesses would need to modify equipment.

However, in recent years, we've moved to digital money in a big way, and many transactions are conducted via debit or credit cards. So the transition may be far less painful than it was in the EU, UK or Canada. And it appears there was little or no transitional pain for any of these locales anyway.

This post was originally published on Smartplanet.com

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