Is the Nickel Next to Go? David Smith Weighs In on the Future of U.S. Coins in USA Today

As the U.S. moves beyond the penny, questions are already emerging about the future of its next smallest denomination, and Pepperdine Graziadio Interim Dean and faculty member David Smith is helping frame the conversation.

Featured in USA Today, Smith offers insight into the economic realities behind coin production, noting that nickels, like pennies before them, cost significantly more to produce than their value." The argument for getting rid of the nickel is that it costs more to produce, quite a bit more, actually, than its face value," he explains.

The article highlights a shifting landscape in everyday currency use. With the penny no longer in circulation, consumers and businesses are adjusting to new norms, including rounding cash transactions and relying more heavily on higher-value coins. While the transition has been largely smooth, it raises broader questions about efficiency, cost, and the role of physical currency in a digital-first economy.

Smith emphasizes that while the nickel faces similar economic pressures, its future is not immediate. Unlike the penny, nickels remain more widely used and accepted in everyday transactions, which may delay any major changes. Still, ongoing production losses and inflationary pressures suggest the conversation is far from over.

Looking ahead, Smith estimates that any potential phase-out of the nickel would likely unfold over a longer horizon. "It'll still be quite some time before we eliminate the nickel," he notes, projecting a possible timeline of 10 to 15 years.

His perspective underscores a key tension in modern currency systems: balancing the practical needs of consumers with the rising costs of maintaining low-value coins. As usage habits evolve and production expenses continue to climb, decisions around the future of coins like the nickel will remain an important economic consideration. Read more here.