Feds say coins, paper money still needed

With the advent of cryptocurrencies and other forms of electronic money, on top of the pervasiveness of credit-card swiping and electronic bill pay, coins and bills may seem outright antiquated.

But the heads of the two agencies who create our coins and print our paper money told Congress on Wednesday that both are alive and well – and necessary.

Forty-two billion notes with a value of $1.7 trillion – the most in history – are in circulation, and that total grows almost 5 percent a year, Leonard Olijar, director of the Bureau of Engraving and Printing, told a House committee. The volume of currency has increased 43 percent from 2008 to 2016.

U.S. dollars remain the world’s currency, Olijar said, and that can be seenin the rush on U.S. currency whenever there is a natural disaster or political turmoil.

And the frequency of cash use has remained unchanged in recent years, he said: about one-third of all transactions and more than half of those under $25.

While the situation with coins is a bit more complex, “the use of coinage is not in immediate danger of being usurped,” said David Ryder, director of the U.S. Mint.

Ryder said there has been focus on efficiency at the Mint and adjusting to consumer needs. For example, the number of coin collectors identified by the Mint has declined from 1.2 million in 2007 to 500,000 today. Also, the market for gold and silver coins fluctuates with the economy, and the use of alternative metals to save on the cost of minting coins is being explored.

Olijar said poorer people have the greatest need for physical currency. Seven percent of U.S. households have no bank, and about 20 percent don’t have full access to bank services, meaning 45 million Americans don’t have access to payment systems other than cash.

“Like other nations, our duty to serve this portion of the population is a factor in slowing any move to a cashless economy,” Olijar said.

By:  Bill Theobald

USA TODAY