DEFINITION of 'Trillion Dollar Coin'

A trillion dollar coin is a theoretical coin that could be legally minted because of a United States law that allows the Treasury to produce platinum coins of any denomination. The concept of creating this platinum coin first came about in 2011 in an effort to solve the issue of the debt crisis in the U.S.

BREAKING DOWN 'Trillion Dollar Coin'

Although there are statutory limits regarding how much paper money can be in circulation at any particular time, as well as rules regarding gold, silver and copper coinage, the U.S. Treasury does have the authority to print coins of any denomination provided they are made with platinum. And unlike the limits on paper money circulation, there are no limits on the amount of coinage that can be in circulation at any one time. Specified in Title 31 (Money and Finance) of the United States Code (see above), the law was intended to allow for the minting of collectors' coins in various sizes. Because of this "loophole," some have cited that the trillion dollar coin could serve as a viable option to avoid the U.S. debt ceiling.


The theory behind a trillion dollar coin is as follows:


1. The U.S. Mint could make several trillion dollar platinum coins.


2. The president could order the coins to be deposited at the Federal Reserve.


3. The Federal Reserve could put the coins in the Treasury.


4. The Treasury could use the money to pay off some of the nation's debt.


Shortly after the trillion dollar coin was brought up in early 2013 as an option to avoid U.S. default, opponents made plans to introduce a bill that would block the Treasury from minting such coins.

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