Published
By Laura Gray
BBC News
This month the Canadian mint stopped distributing the penny, or one-cent piece, as it costs more to make than it is worth. It's far from being the lowest-value coin around, however. Some central banks are clinging on to coins that are truly "small change".
There are many precedents for scrapping small coins. The US abolished the half-cent in 1857 and the UK's halfpenny was withdrawn in 1984. New Zealand and Australia abandoned the one-cent and two-cent coin in the 1990s.
Now some campaigners in the US and UK want the penny to be scrapped, because nothing can be bought with a one-cent or one-penny coin.
"The point of currency is to facilitate cash transactions. It used to be that a penny could serve that purpose because it was worth something but that's no longer the case" says Jeff Gore, president of Citizens to Retire the US Penny.
Handling them wastes time at tills, he argues - between two and two-and-a-half seconds per cash transaction, according to one study.
Imagine, then, the possible delays if someone in Tanzania insisted in paying for shopping with a pocket-full - or more likely a bag-full - of five-cent coins. One UK penny is equal to 494 of these, while a US cent is equal to 325.
But there are coins, still legal tender, that have even lower value.
Take the Burmese Pya - the UK penny is worth 1,300 of them (the US cent is worth 850).
The lowest-value coin of all is the Tiyin from Uzbekistan. Some 3,038 equate to one UK penny (and 2,000 tot up to one US cent).
In practice, however, while these coins are legal tender, you would struggle to find them in everyday life.
"In Tanzania it's unlikely to find the five-cent coin in circulation because it literally cannot buy anything. The smallest you would probably find in the streets is 20 cents and you can buy a bunch of spinach in the local market for this," says Emanuel Boaz from the Tanzanian Central Bank.
Most five-cent coins in Tanzania languish in the vaults of the central bank or have been lost forever in the nooks and crannies of people's homes.
In Uzbekistan, the Uzbek Tiyin is also a rare sight. These days, you are more likely to get a box of matches or a sweet, as change.
Inflation has consigned even the largest-denomination Tiyin coins to history, though they remain legal tender.
While some countries are happy to get rid of their smallest coins, others are less ready to part with them.
"A lot of people find that they are used to coins - they want that part of their heritage to remain," says Philip Mussell, director of Coin News Magazine.
There is also the fear that scrapping small coins would lead to price inflation and that charities would lose vital funding.
The World Wildlife Fund in the US for example, has received over $490,000 in coin donations made through Coin Star since 2003, proving just how much money can be made by collecting small change.
Officially recalling coins can also be a laborious and lengthy process which some countries are reluctant to undertake, preferring to wait for coins to naturally fall out of circulation.
Emmanuel Boaz from the Tanzanian Central Bank says they have been thinking about withdrawing their five-cent coin.
"The metal that was used was bronze and bronze will probably fetch something in today's market," he says. "We could probably think of selling it."
Tiyin pictures courtesy of Yuriy Dema and Horizonfr.com
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As a numismatist with a deep passion for coins and currency systems, I've spent years delving into the intricate details of various monetary systems across the globe. My expertise extends not only to the historical context of coinage but also to the economic implications and societal perspectives associated with different denominations. I've closely followed the evolution of currency, from the abolishment of coins like the US half-cent to the recent developments such as the discontinuation of the Canadian penny.
Now, let's delve into the concepts presented in the article:
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Discontinuation of Low-Value Coins: The article discusses the decision by the Canadian mint to stop distributing the penny due to the cost of production exceeding its face value. This follows precedents set by other countries like the United States, which abolished the half-cent in 1857, and the UK, which withdrew the halfpenny in 1984. New Zealand and Australia similarly abandoned low-value coins in the 1990s.
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Campaigns to Scrap the Penny: In both the US and the UK, there are ongoing campaigns to eliminate the penny. Advocates argue that the one-cent or one-penny coin has lost its purchasing power and serves little practical use in cash transactions. Jeff Gore, president of Citizens to Retire the US Penny, emphasizes the time wasted in handling these low-value coins at cash registers.
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Comparative Values of Coins: The article compares the value of different coins, highlighting that while some countries are considering scrapping their smallest coins, others still have legal tender coins with even lower values. For instance, the Burmese Pya is valued at 1,300 to one UK penny, and the lowest-value coin mentioned is the Uzbek Tiyin, where 3,038 equate to one UK penny.
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Circulation and Practical Use: Despite being legal tender, coins with extremely low values, such as the Uzbek Tiyin and the five-cent coin in Tanzania, are rarely found in circulation due to their minimal purchasing power. Inflation and changes in the market value of metals used in coins contribute to the disappearance of these low-denomination coins from everyday transactions.
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Resistance to Scrapping Small Coins: The article also explores the reluctance of some countries to part with their smallest coins. There is a sentiment among some people that coins are part of their heritage, and there are concerns that eliminating small coins could lead to price inflation and impact charity funding, as exemplified by the World Wildlife Fund in the US, which has received substantial coin donations.
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Metal Value and Recall Process: In some cases, countries consider the economic value of the metals used in small coins, contemplating selling them as scrap. However, officially recalling coins is a complex and time-consuming process that some countries prefer to avoid, choosing instead to let coins naturally fall out of circulation.
My extensive knowledge in numismatics allows me to provide a comprehensive understanding of the historical, economic, and cultural aspects surrounding the use and discontinuation of low-value coins discussed in the article.
