Maintaining the coins costs 4 million a year and most drop out of circulation after just one transaction.
This week, members of the parliamentary Committee on Budget and Finance have endorsed the proposal from the Bank of Lithuania to do away with the smallest coins.
According to the central bank, reminting 1 and 2 cent coins takes considerable resources – 4 million euros a year – while their circulation is usually very short, just one transaction.
“These coins are usually received as change and then not used at all, they are lost,” says the bank’s chief cash specialist Edita Lisinskaitė.
The coins usually end up in the furthest corner of a purse or a drawer, never to be seen again. This way, over 2 million euros are taken out of circulation.
“Today, there are more than 770 tonnes of these coins in circulation, and it would take 11 train waggons to load them,” according to Lisinskaitė.
The Bank of Lithuania proposes to abolish the use of one and two cents in cash transactions from May 2025. If the sum to be paid ends in 1 or 2, it will be rounded down to 0, while 3 or 4 will be rounded up to 5.
This will only apply to cash transactions, payments by card would not be affected.
Ordinary shoppers seem to agree with the initiative.
“If we do away with it, that’s good, because there will be fewer coins in our wallets,” says a woman interviewed by LRT TV.
“There is no need for one or two cents, they are just thrown around unnecessarily. You get change in one-cent coins and don’t know what to do with it,” says another.
Some buyers insist, however, that sums should always be rounded down.
“Everything is always to the disadvantage of the buyer. I think it’s all right [giving up small coins], why keep the rattling metal, but let’s make it more advantageous to the buyer,” says a man.
“I think it’s a bad thing – this will be yet another opportunity to raise prices,” believes another woman.
The Bank of Lithuania says it has carried out a study and calculated that the rounding rules on the whole would not disadvantage either the buyers or the sellers.
“Sometimes the bills will be rounded down and the buyer will save at most 2 cents, while at other times it will be rounded up, but no more than 2 cents,” says Lisinskaitė.
Mindaugas Lingė, chairman of the Committee on Budget and Finance, says the legislation will be put before the parliament if the opposition supported it. After a debate in the committee, the opposition said they would.
“I think it is a really good decision and, as far as I have heard from the public, they would also support this position that the 1 and 2 cents should be dropped,” Algirdas Butkevičius, the committee’s deputy chairman, said.
However, some members question what will happen if people come across old coins in their possession after May 2025.
“Why can’t I pay in cash and spend those coins? Especially people in the regions, they won’t come to the Bank of Lithuania in Vilnius [to exchange unused coins], it wouldn’t be worth their while,” said Andrius Palionis, another member of the Committee on Budget and Finance.
Lingė says that shops will continue to accept the coins even after May 2025.
“A person will not be required to pay 1 or 2 cents at the cash desk, [...] but the shops will accept 1 or 2 cents, only when they give change they will have to use the rounding rules,” he says.
Six EU countries are now phasing out 1 and 2-cent coins.
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