The withdrawal of low-denomination coins is a significant change that may affect your daily life. In Australia, for example, the Reserve Bank of Australia has announced the withdrawal of the $2 coin.
You may be wondering what this means for you. The good news is that you won't be able to use or exchange low-denomination coins after a certain date.
The Reserve Bank of Australia has set a deadline for the withdrawal of the $2 coin, which is expected to be in the near future.
Impact and Future
The Treasury will publish a summary of the responses to the consultation, taking into account the opinions and views expressed.
If the general feedback is positive, the changes could be introduced over a period of time.
Engagement and Feedback
Your views matter, and the Treasury wants to hear from you. They're holding a consultation to gather feedback from all sectors and groups to understand any issues that need to be addressed.
The Treasury will use your feedback to determine whether to withdraw low-denomination coins from circulation. This decision will be made based on the level of support received.
Your input will also help the Treasury prepare a communication plan to explain how the withdrawal of low-value coins and the introduction of rounding would work.
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2 Answers
In Sweden, the lowest denomination coin has been removed several times, with the last removal being in 2010, when around 400 million 50 öre coins were taken out of circulation.
The total value of these coins was around 200 million kr, which is roughly 25 million USD or $2.50 per capita.
Around 70% of the removed coins were never returned.
The Swedish currency, krona, has the acronym kr, and 1 kr is equal to 100 öre.
Money is still charged in increments of 0.01 kr, even though the smallest cash denomination is 1 kr.
When paying electronically, the exact amount is charged, but when paying with cash, the amount is rounded to the nearest krona.
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It's possible to game the system by using a card when the amount would be rounded up and using cash when it's rounded down, but no one seems to do that.
The total value of the removed coins was so low that it's no longer profitable to bother with the system.
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Why Your Views Matter
Your views will help shape the future of low-value coins in circulation. The Treasury needs to hear from all sectors and groups to understand the potential issues that may arise.
This consultation is an opportunity for the Treasury to gather a wide range of perspectives and opinions. Your input will be valuable in determining whether to withdraw low-value coins from circulation.
Your views will also assist the Treasury in preparing a communication plan for the withdrawal of low-value coins and the introduction of rounding. This plan will show how the change would operate.
By sharing your thoughts and experiences, you'll be helping to inform a crucial decision that affects the way we use money.
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Frequently Asked Questions
Will the US get rid of the penny?
The US is unlikely to remove the penny from circulation without significant changes to its coin management system. Congress plays a major role in decisions about US coins, making major changes unlikely.
Sources
- https://www.coinworld.com/news/world-coins/cents--two-cent-coins-taking-permanent-vacation-in-caribbean-.html
- https://eng.lsm.lv/article/economy/banks/28.09.2023-small-denomination-coins-may-soon-be-on-the-way-out.a525736/
- https://economics.stackexchange.com/questions/4665/what-effect-would-removing-the-lowest-denomination-currency-have
- https://consult.gov.im/treasury/removal-of-1p-2p-and-5p-coins/
- https://ewnews.com/central-bank-proposing-elimination-of-1-cent-coin-effective-dec-31-2020/
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