A new study says dropping the paper dollar in favor of a $1 coin would save the federal government $4.4 billion over the next three decades, chiefly because the coins wouldn’t need to be replaced as often, reducing the cost per unit.
The Government Accountability Office said Wednesday that the higher costs for minting the coins would lead to costs in the near term, but over the long haul the coins would pay off handsomely.
In a podcast accompanying the report, Lorelei St. James, director of GAO’s physical infrastructure issues department, said it costs the government 15 cents to produce a coin.
The $4.4 billion in savings is slightly lower than a GAO estimate last year that said savings could top $5.5 billion.
Right now, both coins and bills are in circulation. Last year, the Treasury Department said it would stop producing new coins until its stockpile of more than one billion coins is used up. The U.S. Mint believes it has enough coins to cover new demand for the next decade.
The Treasury Department says that switching to all coins could end up costing the private sector money, since vendors would have to adjust.