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. The idea gained notoriety and went viral with #MintTheCoin trending for a period of time on social media platforms. 

Two years later when the debt ceiling debate reared its head again, there were talks the president could invoke the Fourteenth Amendment of the Constitution to issue debt that exceeds the ceiling. However, at the time, the Treasury Department's Daniel Watson said that the Amendment does not give the president the power to ignore the debt ceiling. 

 

RELATED TERMS
  1. Mint

    A mint is the primary producer of a country's coin currency and ...
  2. Dead Coin

    Dead coins refer to cryptocurrency tokens whose value has tumbled ...
  3. Lawful Money

    Lawful money is any form of currency issued by the United States ...
  4. U.S. Treasury

    Created in 1798, the U.S. Treasury is the government (Cabinet) ...
  5. Statutory Debt Limit

    The statutory debt limit, also called the debt ceiling, is the ...
  6. Instamine

    Instamining is the process of dramatically simplifying the mining ...
Related Articles
  1. Insights

    Giant Gold Coin Stolen From German Museum

    The 221-pound coin would be worth close to $4.5 million at current gold prices.
  2. Tech

    New Counterfeit-Proof £1 introduced by the British Royal Mint

    Dubbed "the most secure coin in the world", the new British £1 coin entered circulation March 28.
  3. Investing

    5 Best Bets For Buying Gold

    Gold is a desirable alternative for those looking to diversify their risk. Jewelry, bullion, gold-mining companies' stocks, and ETFs are some of the available investment vehicles.
  4. Tech

    How Did Bitcoin Gold Prices Perform in 2017?

    Bitcoin gold hasn't been in existence for two full months yet, but it has already drawn attention.
  5. Personal Finance

    Should Congress Raise The Debt Ceiling?

    Some members of Congress say the debt ceiling must be raised while others insist it's time Uncle Sam learned how to get by without any more borrowing. We'll look at the issues at stake.
  6. Investing

    A Look At National Debt And Government Bonds

    Learn the functions of the U.S. Treasury, and find out how and why it issues debt.
  7. Tech

    Tron Surges: Ethereum Tops $1,000 As Bitcoin Price Falls

    As bitcoin's price stumbles, altcoins like Tron are driving the cryptocurrency markets right now.
  8. Personal Finance

    How to Use Mint

    Mint's simplicity has drawn more than 10 million users to learn from its array of personal finance tools. Here are some tips to get started.
  9. Insights

    Treasury's Mnuchin to Congress: Raise Debt Ceiling

    As the debt ceiling looms, Treasury Secretary Mnuchin calls on Congress to act fast.
RELATED FAQS
  1. When did the U.S. start using paper money?

    The roots of paper money in the U.S. dates back to the 1600s in Massachusetts, when the pioneering colony printed bills and ... Read Answer >>
  2. Which economic factors impact Treasury yields?

    Learn about the economic factors that impact Treasury yields. These yields are the benchmark yield for debt notes around ... Read Answer >>
  3. How are treasury bills (T-bills) taxed?

    Lear how the Internal Revenue Service collects taxes on treasury bills (T-bills) purchased from the United States government ... Read Answer >>
Trading Center