The Federal Reserve’s 40-Year Coin Problem

By Pete Rizzo (@pete_rizzo_)  

It may have taken some outlandish statements from U.S. Senator John McCain to bring the issue back into the spotlight, but the U.S. government has been trying to kill the $1 bill for nearly a decade.

Passed in 2005, the Presidential $1 Coin Act requires the Board of Governors of the Federal Reserve System to submit an annual report on “obstacles to the circulation of $1 coins.” By switching to longer-lasting coins, groups like Citizens Against Government Waste say the U.S. government would save $13.8 billion over the next 30 years.

The Federal Reserve’s latest yearly report was released in July 2013, and it indicates that while the $1 coin may be more durable, $1 greenbacks are still more popular.

The Federal Reserve report estimated that $1.4 billion in unused $1 coins is currently sitting in Federal Reserve vaults. This figure was up slightly from $1 billion in 2011, but has remained stagnant since the coins stopped being minting in 2012.

As this chart illustrates, the Federal Reserve’s aggregate inventory of $1 coins decreased by only 23 million pieces from the second quarter of 2012 to the second quarter of 2013. 

“We estimate that Reserve Banks hold more than 40 years of $1 coin inventory, assuming continuation of current levels of demand,” the report authors wrote.

NPR indicated that 2.4 billion coins had been printed from 2007 to 2011, at a cost of $720 million to U.S. taxpayers. The media outlet further indicated the government made $680 selling 1.4 billion coins to the public during that time.

The following chart indicates that these sales have declined. The report showed that the Federal Reserve paid to insert 66 million coins into circulation (payments to circulation) during the second quarter of 2013. During the same period, it bought back (receipts from circulation) 53 million pieces.

Scroll your cursor over this Interactive Data Point to reveal details about how $1 coin use has changed since the Fed began tracking key metrics in 2007. The result is a detailed look at the success of the $1 coin initiative that allows you to assess your stance on an ongoing debate.

For more data and insights, read the Federal Reserve’s full report here.