Did you also think that for money to disappear, some huge political, economic or natural disaster must come? That's usually the case. But sometimes the reason can be considerably more "petty" and simple.

Okay, maybe I didn't phrase it exactly. We are not talking about the fall and demise of the currency as such. In this case, it is only our physical coin of one koruna that is at risk. That is, our smallest currently valid coin. Indeed, speculation is beginning to spread more and more frequently on the internet that the fate of the physical one crown could be similar to that of the 50 cent coin.

Why is the crown in danger?

The reason is quite simple. The production cost of the coin is getting dangerously close to its face value. If it exceeds it, it simply would not be worthwhile for the Mint to mint the coin.

However, from the information available on the internet, it does not seem (at least I have not come across any such info or specific statements) that the coin will be withdrawn from circulation in the near future, as was the case with the 50 cents. They were cut off in 2008. As in the case of the 10 and 20 pennies, which expired in 2003, the 50 penny coins gradually ceased to fulfil their function, especially that of currency. In practice, this means that only 10% of coins of this value were returned to the central bank from circulation.

In 2019, for example, almost 43 million one-cent coins were minted. That's a good amount. And if production were to be at a loss, it would certainly no longer be pleasant for the Mint.

The matfyz website then states this:

The principle of a significant mismatch between the face and the material value of a currency persists in modern finance. The nominal value of coins is guaranteed by the issuing state. The production cost is usually much higher than the value of the material used, and even this can exceed the face value. In that case, the particular coin is withdrawn from circulation. The 10 and 20-haler coins were therefore discontinued in 2003 and the 50-haler coin in 2008. However, these denominations continue to exist in non-cash payments.

How much does it cost to produce a crown?

The average production cost of one Czech coin was CZK 1.87 in 2009, including VAT. However, according to the CNB's press department, how much it costs to produce each coin is the subject of a contract between the central bank and the mint and is therefore a trade secret.

However, this is more than 10 years old information. It can therefore be assumed that the price must have been significantly higher last year. This is not to mention the current situation, which is throwing the price of energy and other production-related expenses several times higher down the throats of the production companies. However, let us bear in mind that the average price (which we can only speculate about anyway) is really the average of all coins here. Thus, even, say, fifty crowns, which will be considerably more expensive and demanding to produce.

All Czech coins come from the Czech Mint, which is a partner of the CNB and other central banks. But even such an important company cannot escape the effects of inflation and has to cope with rising production costs. Balancing the production and nominal price of a coin is just one of the pieces.

https://www.youtube.com/watch?v=ALowIExMUV8&t=218s

Would anything happen?

Now we can speculate a bit here - would anything happen if the one-crown was indeed withdrawn? Let's draw on the experience of the 50 cents being withdrawn. The statement from 2007 when the withdrawal of this coin was announced looked like this:

"For price-sensitive goods, items of CZK 1.90 or CZK 9.90 are still appearing, even though dimes have long been out of circulation," Pavel Sobíšek, an analyst at HVB Bank, told ČTK. Goods offered for CZK 2.50, for example, may remain at the same price, while only those who would buy an odd number of pieces would pay a 50th more."

Which is still true today. However, I repeat again that there is no actual news as yet regarding plans to withdraw the Crown.

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Disclaimer: This is in no way an investment recommendation. This is purely my summary and analysis based on data from the internet and a few other analyses. Investing in the financial markets is risky and everyone should invest based on their own decisions. I am just an amateur sharing my opinions.