CANADA CONSIDERS DISCONTINUING THE NICKEL

The future of Canadian coins and currency were mentioned in a report this week issued by Canada’s financial service organization, Desjardins:

• Eliminate the 5-cent nickel within five years.
• Discontinue the 25-cent quarter and replace with a 20-cent coin.
• Thus 10-cent, 20-cent, 50-cent will be the only three coin denominations less than one dollar.
• Add a new $5 circulating coin to replace the $5 bill but this may be delayed because of the success of the new polymer bills.

There are more Canadian coins and currency in circulation than ever before, despite the increasing number of cashless ways to make payments. That’s not likely to change. However, Canada should avoid eliminating cash entirely, very unlikely to vanish in the next 10 to 20 years, said the financial company’s report.

The Canadian cent was discontinued in 2012. The nickel is next to be eliminated. “The time will come when the nickel will have to be taken out of circulation” the report stated. Without giving the reason for the elimination of the quarter and substituting a 20-cent coin would be the necessity to round off all transactions to the nearest 10-cent multiple. Nickels and quarters don’t comply.

Reviews of the cent’s demise were mostly positive. Few people miss it and it has reduced the cost for both business and the government the report stated. The public accepted rounding off a total transaction amount– Canadians call it the “tally” amount – to the nearest 5-cent multiple. This paves the way to round off to the nearest 10-cent amount when the nickel disappears.

Eliminating low value coins is a result of a vibrant economy. The purchasing power of low value coins diminishes as the economy increases. More than 22 countries around the world have eliminated one or more of their lowest value coins. In a few instances new high value coins have been issued to replace paper money of the same denomination. Coins last longer, in contrast to paper money needs to be constantly replaced.

Are you listening U.S. Treasury officials? Canada’s success could be replicated in the United States.

To read the complete article, see:
Canadian bank wants to phase out five-cent, 25-cent coins (http://economiccollapsenews.com/2016/05/04/canadian-bank-wants-to-phase-out-five-cent-25-cent-coins/)

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