Could there be an elimination of the cents system in this location? - Should we Eliminate the Use of Pennies as Well?
The United States is set to discontinue the production of one-cent coins, with no new pennies to be minted from January 2023, according to US media outlets and the Treasury Department. This move comes as a result of the high production costs, which surpass the face value of the coins. In the European Union, particularly in Lithuania, a similar trend has emerged, with cash payments being rounded off to phase out one and two-cent coins [3].
In contrast, Germany is currently debating this issue, although a proposal has been made to make one and two-cent coins obsolete. The German Federal Bank, through the “National Cash Forum” itinitiated, proposed rounding cash payments to the nearest five cents, thereby streamlining transactions at the checkout. However, the new federal government's stance on this proposal remains unclear.
Despite this proposal, cash remains the predominant method of payment in Germany. While many consumer advocates, like Dorothea Mohn, welcome the idea of phasing out small change, retailers may find it limiting as odd amounts serve as a crucial tool for price differentiation among customers [4].
While this rounding practice has been adopted by countries within the Eurozone, such as Finland, the elimination of small euro coins can only be decided at the European level [3]. The economic and ecological costs of producing, packaging, and transporting one and two-cent coins are high in relation to their face value, according to Bundesbank board member Burkhard Balz [4].
In the United States, concerns about the end of cash have arisen following the decision to stop minting pennies, but these fears have proven unfounded in Eurozone countries where rounding rules have been implemented [3]. The debate over the future of small change in both the US and Germany continues, with each nation considering the implications for their respective economies and consumer behavior.
- Frankfurt, Germany
- Berlin, Germany
- US Media
- Bundesbank
- United States
- In the United States, while the production of one-cent coins is set to discontinue, such a measure is currently under debate in Germany, as both nations consider the potential impact on their economies and consumer behavior.
- The high production costs of one and two-cent coins, which surpass their face value, have led to their elimination in some EC countries, like Finland, and are now under consideration in Germany, particularly in the debate about the future of the one-cent and two-cent coins.
