US Coins

Monday Morning Brief for March 2, 2020: Making a coin circulate

Proponents of the initiative to circulate 2020 Native American dollars in Alaska are already beginning the process on their own.

Coin image courtesy of U.S. Mint; background image courtesy of the Alaska Governor's Office.

How do you place a coin into circulation that was never intended to circulate? Alaska state officials, banks in the state, and officials at the Treasury and Federal Reserve are all trying to figure out how to do that.

For most of this century, the U.S. Mint has struck two denominations of coins that are not intended to circulate — the half dollar and the dollar. 

The Mint is forbidden to strike dollar coins for circulation by a Treasury order issued in 2011. No such order bans the production of half dollars for circulation, but the Federal Reserve has not ordered them since 2001.

Since 2002 and 2012, for the respective denominations, circulation-quality Kennedy half dollars and Presidential and Native American dollars have  been struck for collector sales only, at a premium, as are the new American Innovation dollars. 

Neither denomination circulates widely, and current Federal Reserve and commercial bank inventories are more than sufficient to meet the small demand that does exist.

It seems strange to many that the Mint strikes collector versions of coins not needed in circulation. Sure, the Mint has done that sporadically since the 19th century — the 1895 Morgan dollar, 1884 and 1885 Trade dollars, 1970-D Kennedy half dollar are examples of coins known only in collector versions. But the current process has been ongoing for nearly two decades in the case of the 50-cent coin. Still, collectors seem to embrace the practice, and they order the various circulation-quality half dollars and dollars every year.

Now, though, something else is happening. Alaskan officials want the 2020 Native American dollar, which celebrates a local civil rights hero, to enter circulation in the state.

No mechanism exists for this because no one of an official status has requested it before. Officials continue to work on making this happen.

If Alaska is successful, do not be surprised if officials in other states try to do the same thing, either with the Native American dollars or, especially, the American Innovation dollars, since one will be issued for each state. What officials do now will create a blueprint to be followed in the future. We will watch how the experiment unfolds in the weeks ahead. 

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