Why did US $2 bill fail to become commonplace, unlike in Canada and elsewhere?
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Currency denominations seem to be efficient* when they follow roughly half-an-order-of-manitude increases -- e.g. $0.05 to $0.25 to $1 to $5 to $20 to $100.
Adding mere doublings in there just complicates things for no good reason. There's already no particularly good functional reason for dimes or $10 bills, except we seem to want a denomination for every power of 10 -- it's more of an aesthetic thing.
But there's absolutely no practical reason for a $2. There's no functional reason and no aesthetic reason either.
* Finding a practical balance between carrying a minimal number of bills for any given total value (where powers of 2 would win), versus minimizing infrastructure like sizes of cash registers (where powers of 10 would save space in layout).
(Edit: maybe the case is different for heavy coins though? E.g. $10 in $2 coins will weigh significantly less than in $1 coins in your pocket. On the other hand, the US already mainly uses bills for $1, which is why $2 makes no sense in the US.)
When someone pays, say 6.80 euros and gives you a 10 what virtually every cashier does is:
- tell you it's 6.80
- add 20 cents to get to 7 and put them on the table while saying "seven"
- add 1 euro to get to 8 and put them on the table saying "eight"
- add 2 euros to get to 10, put them on the table "and ten, thank you good bye"
Now add 2.50 euros to the mix. It gets complex and slower which is what you want to avoid when counting money.
Same reason why we have 1, 2, 5, 10, 20, 50c coins but no 25c one.
Some shops have the machines do the calculation and even give you the change automatically, but that's not most of the businesses, it's more common in supermarkets than say a diner, a gas station or your auntie's garage.
I guess that's why it doesn't seem difficult for anyone in the US -- we have $0.25 coins but not $0.20 ones (nor $0.50 ones in common usage), and I've simply never heard of anyone saying that thought quarters made anything more complex or slower.
It's just a non-issue. But it's also funny that in the US you don't really see anybody counting change the way you're demonstrating -- it seems backwards. Like, first you calculate the change, and then you count out the change. If it's $0.40 in change, then it's a quarter and a dime and a nickel without even thinking about it.
Clearly we need $1, $3, $9, $27 bills ;)
An interesting thing to think about is-- assuming the distribution of transaction values follows a power law-- where's the point of diminishing returns on having more denominations? I know this isn't well-posed; we'd also have to quantify the downside in having more denominations.
A 20c coin was tried to great failure in the 1870s.
There was a $2.50 gold coin issued for most of the era when gold coins were issued for circulation.
I note the 1-5 only scheme is fairly common too: Japan and South Korea went there (with both having a 2000 denomination note as a limited run commemorative); Russia went that way for their 1998 currency reform, but more recently added a 200 and 2000.
Thanks but no. I’m not gonna carry around four bills ($5 x2, $20 x2) if I just want to carry $50.
You'd just carry three $20's.
Cashiers and stores hate it when you break $50's anyways.
We shouldn't have $1 or $2 bills because they fall out of circulation too fast, but everybody interested in this topic knows it already.
It's bizarre how antiquated our cash is and how there is no appetite for removing the penny from circulation either. I really thought we were going to pursue this like 20 years ago but nope... our government is too dysfunctional for even these types of changes
Canada also withdrew its penny in 2012. There's been talks of withdrawing the 5c coin recently but I doubt it will happen soon.
$100 in 1969 is over $800 inflation adjusted dollars. Our government seems insistent on phasing out cash in favor of digital mechanisms they can track more easily.
In Europe, we tend to have coins up to the value of approximately USD 2, included. The eurozone obviously has 1 and 2 euro coin. Czechia has 20 CZK and 50 CZK coin. Poland is slightly bucking the trend, because 5 PLN is a coin (of value more than 1 USD), but 10 PLN is already a bill. Bulgarian has 1 BGN and 2 BGN coins...
Coins can take a lot more daily use than paper money, and are handy to use in parking automats etc.
I wonder of one of the reasons for this difference is that US WCs tend to be free?
Toilets are paid in much of Europe, and you generally use a suitable coin for access, though lately some of the facilities started accepting contactless cards as well. Paying for a toilet with a bill would be very impractical. That is a frequent use case in Europe, which necessitates existence of suitable coins. But in the US, this use case seems to be rare, if extant at all.
As for coins being useful for parking, around here (Canada) we've already moved beyond the pay-and-display machines (which don't even accept cash) to - horrors - a sign with a QR code. Nothing worse than wanting to do a quick 15 minute stop to show visitors something, scanning the QR code and being greeted with an account signup page that demands a ton of information. But cash? Hardly used at all any more.
The only US$2 bill I've ever encountered - and of course I kept it as a souvenir - was in the change for a $5 in Tanzania, of all places. The Plattsburgh ferry used to give either 50 cent or $1 coins in change for $10 - this dates me!
The pre-loonie Canadian $1 coins obviously never gained any collector value. I got a sheet of a whole bunch of different years at a garage sale for face value!
I'll do you one better: I like the classic Voyageur design, so when I visited Toronto this summer I figured I'd pop into a coin dealer and get an album and start building a set.
I asked about the post-1968 nickel ones, and he said he had a big bucket I could go through. How much? "50 cents each." "You mean $1.50, right?" Nope. They were worth less than face value for him because he had to go through the hassle of trading them in.
Went away with 20 of them, and some higher margin items to make up for it.
The US introduced a USD 1 coin in the 1970s. It was an exceedingly poor effort and failed miserably. The memory of that failure is likely the reason we don’t get rid of the bill now.
We reintroduced the dollar coin 20 years ago. This time, they addressed all of the problems. I think that in another 10-20 years they will remove the paper bill, and nobody will care.
So, in my mind, that’s why they weren’t popular: they weren’t really distributed like other currencies. Akhams razor.
It just begs the question of why they weren't distributed well, which can be answered with "because nobody uses them". It's a circular logic that can not be broken from within. We need other, better reasons to consider the question answered.
I was used to paper currency and coins both having more significant value. A handful/pocketful of change in the UK, where there are 50p,￡1, and ￡2 is generally worth about￡5. Similarly cash in my wallet is typically worth ￡20+.
Moving to the US I found that coins are basically worthless. To carry $5 you need a lot of them. And a small bill selection can be anywhere from $5 to $500. Being all the same size and color makes it even harder to assess quickly.
Of course, now I don't carry much of either and just Apple Pay for everything.
I think this sums up the discussion.