In the wake of the devastating Equifax breach, which exposed the private financial information of an estimated 143 million Americans, lawmakers in Washington are scrambling for solutions to the increase in sophisticated cyberattacks targeting private citizens. Other attacks like the WannaCry ransomware attack of May 2017 affected almost a quarter of a million Windows users worldwide in over 150 countries, extorting payments in bitcoin in exchange for restored access to important personal files.
In short, it is becoming increasingly apparent that either security software needs to be vastly improved, or a return to more traditional forms of currency may be required in order to spare the personal and financial information of American citizens from the nefarious plots of cyber criminals. Physical currency cannot be hacked, and should someone become the victim of identity theft, cash would be the only source of wealth that they would be able to count on. It is for these reasons, in addition to saving billions in taxpayer money, that Congress is attempting to push forward the bipartisan Coins Act.
The Currency Optimization, Innovation, and National Savings Act of 2017, or “Coins Act,” was introduced on March 29, 2017, by Senator John McCain (R-AZ) and includes the suspension of the production of one-cent coins, aside from collectible coins, for a 10-year period. It also provides for a modification to the composition of the five-cent coin and replacing $1 notes in circulation with $1 coins. After these provisions are put into place, the Government Accountability Office intends to study the effect of this temporary suspension and make a recommendation whether or not production should remain suspended. The bill was referred to the Senate Committee on Banking, Housing, and Urban Affairs, and has remained there since.
In an October 15 commentary on CNBC, former Mint directors Philip N. Diehl and Edmund Moy point out that the United States is one of just three industrialized nations that do not use high-denomination coins in place of low-denomination bills. The use of low-denomination bills wastes tens of millions of dollars each year in production costs that are footed by the American taxpayer. Combined with changing the composition of the nickel to a more cost-effective formula and suspending production on pennies, bipartisan economists estimate that we could save $16.3 billion per year. Furthermore, dollar coins last much longer than paper dollars in circulation, with an average lifespan of 34 years.
Americans have been free to reject dollar coins because the bills remain in constant supply. Ceasing their production would force the use of coins, but the public outcry would probably be considerable. According to Diehl and Moy, however, 70 percent of Americans of every political stripe support changing to a dollar coin, once the national cost savings are explained to them. Politicians who fear the voters’ wrath would do well to note that statistic. Clearly, communicating the reason for the change is key to encouraging acceptance.
Former top Treasury and Mint officials across the board have advocated for common-sense changes to the way our currency is produced for some time. What do you think? Are these currency changes a step in the right direction, or is there more that we can do to save in taxes and beef up our cybersecurity?