The core of the issue is that we don't take into account inflation and GDP growth (and this problem afflicts ither countries too). According to the Economic History Association US GDP per capita in 1913 was $401.53 when the US Federal Reserve was established. ($5301 in 1990 international dollars). It initially printed $5, $10, $20, $50, $100, $500, $1,000, $5,000 and $10,000 bills some of which were only printed until 1945 and issued until 1969.
It meant you could use cash conveniently for almost all transactions barring huge amounts of real estate or buying a large company. Part of the allure of cryptocurrency is privacy. Well cash mostly gives you that so why not keep it viable too.
Just going up to the $100 bill that meant that about a quarter of GDP per capita could be expressed as an easy to hold bill. According to the St Louis Federal Reserve Q2 GDP per capita was $85,099. Proportionally to 1913 the equivalent $100 bill would be $21,193.68. That rounds to a $20,000 bill. The ratio of a quarter to GDP per capita then expressed in todays GDP per capita is $52.98. that implies we should have a $50 coin.
We are richer now so its reasonable that we have more coins and bills to reflect that. While the ceiling for bills is best reflected by the size of the economy, inflation best measures the minimum coin We even used to have a half cent coin too which gives a good sense of what the minimum value of a coin should be. That way we can have coins that roughly have the same smallest value in inflation adjusted terms while having the largest ones that keep pace with incomes.
A half cent in 1913 is now worth 16 cents in today's dollars. So we should either start with a dime or quarter coin. Personally I'm happy to start with a dime. Coins also reflect very commonly used bits of currency and as incomes rise with inflation and GDP per capita the requirement for what coins we need will go up ahead of just inflation.
In order to make cash fully viable we need the following coins:
Dime - 10 cents
Quarter - 25 cents
$1 coin
$2.50 coin serving the same function as an old quarter
$10 coin
$20 coin
$50 coin
Bills:
$100
$200
$500
$1000
$10,000
$100,000
The old $10,000 bill is about $2 million relative to GDP per capita now. If there was demand we should akso print a $1 million dollar bill too.
People are scared of large amounts of cash but that is because they're socialized to be especially by those who make money by opposing cash.
We have a measurable number of people who are unbanked and have to pay exorbitant fees just to access their own money. More access to cash would help while also mandating that businesses accept cash.
Cash means that financial service companies have a harder time figuring out a way to charge fees so of course they don't like it and ditto for certain legislators too who get huge campaign contributions from them.
Unless we update our currency once every 10-30 years (depending on inflation) cash will become unviable. The debate over the one cent coin is just a small part of much larger problem.
Btw, don't fall for the criminal thing and suggest that we must eventually give up all of our financial privacy as they bury cash.
Look at this paper which finds:
"that the anti-money laundering policy intervention has less than 0.1 percent impact on criminal finances, compliance costs exceed recovered criminal funds more than a hundred times over, and banks, taxpayers and ordinary citizens are penalized more than criminal enterprises."
https://www.tandfonline.com/do...