It’s Friday afternoon musings time: have you ever stopped to consider what a euro coin is really worth? Beyond its face value, could there be a hidden worth lurking within your pocket change? Let’s dive into a thought experiment: if the Eurozone faced a breakup, what would become of all those euro coins jingling around?
Of course, in any currency transition, banknotes and coins would initially be exchangeable for new currencies. But eventually, the old guard becomes obsolete. So, what happens then? History offers some compelling lessons.
Think back to currency upheavals of the past. When the Soviet Rouble crumbled under hyperinflation, something fascinating happened to the coinage. The metal in the coins became more valuable than their nominal worth. Suddenly, those once-official coins vanished from circulation, spirited away to be melted down for scrap. Legitimate businesses even sprung up to handle this flow, shipping containers full of coins to refineries.
Now, let’s turn our attention to the euro coins in your wallet. Not all euro coins are created equal when it comes to recyclability and intrinsic metal value. Those smaller 1, 2, and 5 cent coins? Despite their copper color, they’re actually copper-plated steel. Steel contaminated with copper is not particularly desirable in the scrap metal market, making them worth very little, perhaps as low as $50 per tonne – essentially negligible. Stashing away piles of these hoping for a windfall is likely a losing game.
However, the 10, 20, and 50 cent euro coins are a different story. These are crafted from a copper-aluminum-brass alloy, with a significant 89% copper content. With copper prices hovering around $8,000 per tonne, even a small 50 cent euro coin, weighing roughly 7.5 grams, starts to look interesting. A quick, back-of-the-envelope calculation reveals that the copper in a 50 cent euro coin is worth a few cents at current prices. While not a fortune, imagine the cumulative value in a bank vault filled with these coins. Suddenly, shipping them off to a refiner becomes a viable proposition.
The 1 euro coin, also around 7.5 grams, is composed of a nickel-copper alloy. With nickel valued at approximately $17,000 per tonne and copper at $8,000, the combined metal value per tonne averages around $12,000. This translates to a single euro coin holding a metal value of roughly 6 US cents.
Considering there are an estimated 250,000 tonnes of euro coins in circulation, the potential for melting them down becomes a tangible economic factor, especially if the euro’s future were uncertain.
Interestingly, a euro breakup scenario would likely trigger a temporary surge in demand for coin metals. New coinage for successor currencies would need to be minted before the old euro coins could be recalled. This would create a significant, albeit temporary, spike in demand for metals like copper and nickel as hundreds of thousands of tonnes are needed for new coins. Subsequently, prices would likely adjust downwards as the old euro coins re-enter the market as scrap.
And what about the paper euros? Again, history provides a quirky solution. After the Soviet era, at least one Baltic state (possibly Latvia or Lithuania) found an inventive use for defunct banknotes: they mulched them and extruded them into toilet paper. Banknotes are made from high-quality, very soft paper, making them surprisingly suitable for this purpose. One might even say there’s a certain poetic justice in that particular form of recycling.
