As a result of Canada’s decision to remove the penny from both circulation and production, many are wondering if the nickel is next in line to suffer a similar fate. According to an economic study published by Desjardins, the Canadian 5 Cent coin could very well become extinct. The study cites the main reasons for such a move being the fact that the coin will seem less and less useful because of its low purchasing power, as well as because of what it costs involved for both businesses and consumers.
Would This be a Good Idea?
It is stated that cash payments would be rounded to the nearest ten cents without the nickel, as a result, the 25-cent coin would also become irrelevant Consequentially, the 50-cent coin would end up becoming much more useful and an additional step would be to consider introducing a 20-cent coin – standard practice in many other countries. All of these changes are aimed at making paying in cash more efficient. Mainly due to the fact that payment by electronic means and cards has continued to grow in popularity in recent years, the reason for which is their speed and simplicity of use.
The Added Cost of Delay
At the moment, the study also reveals, there is no significant pressure on the Royal Canadian Mint to produce the 5 cent coin. This is only because of a recycling system that has been put in place in order to help contain the pressure and putting in place such a system is costing the consumers who use it. When one adds to that the costs to handle, ship and store the coins – costs that are assumed by financial and business institutions – it becomes clear that it is necessary and financially savvy to transition to a different, long-term solution.
What Happened to the Penny
The Royal Canadian Mint ceased producing 1 cent coins in May of 2012 and stopped distributing them on February 4, 2013. Since the cost to produce the penny exceeded its market value – as well as significant handling, shipping and storage costs – the coins ended up becoming a burden. Additionally, fewer and fewer Canadians were carrying pennies in their pockets or wallets and overall interest in them had declined significantly. As a result, the RCM was under increased pressure as it had to continually issue new coins. Despite not being produced or in circulation any longer, Canada’s 1 cent coins still retain their legal value and can be used as a means of payment or returned to a financial institution.
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It might be a good idea to stock up on Canadian 5 cent coins, because they could fetch high value if they are withdrawn from circulation. If you’re currently looking to enrich your coin collection with specimens that have been out of circulation for a long time, then Colonial Acres Coins is THE place to be. Home to a professional and experienced team of expert numismatists, Colonial is where you’ll be able to find interesting coins, earnest appraisals, consignment opportunities and all sorts of knowledge and information related to numismatics. Head down to Colonial Acres today and get everything you need in one place.