The United States is experiencing a shortage of coins in the summer of 2020 due to the current 2019 Novel Coronavirus pandemic, which has caused retail outlets, dining establishments, banks, public transportation concerns, and other commercial entities to warn customers that only exact change or electronic payments can be accepted.
Coin Shortage in the United States; Federal Coin Task Force Created Due to 2019 Novel Coronavirus Pandemic
The shortage is significant enough that the Federal Reserve Banks of the United States has been actively involved in mitigating it with two initiatives: a temporary change in management of the allocation of coin orders and inventories in all offices and coin distribution locations of the Federal Reserve Banks effective as of Monday, June 15, 2020; and the establishment of a coin task force in the United States earlier this month, with the goal of completing a first set of recommendations by the end of July of 2020 — and at the end of this first phase, the group will share its progress and evaluate the benefits of continuing the Coin Task Force.
Two possible reasons — both of which are due to the current 2019 Novel Coronavirus pandemic — have been attributed to the significant disruption of the supply chain and normal circulation patterns for coins in the United States: one is the hoarding of coins and money by people in general when the economy was effectively shut down; and the other is the forced closure of business entities as a result of mandates and executive orders from governments — especially those which are known to accept coins, such as laundromats.
“The primary issue with coin is a dramatic deceleration of coin circulation through the supply chain”, according to this article from the Federal Reserve Banks of the United States. “As of April 2020, the U.S. Treasury estimates that the total value of coin in circulation is $47.8 billion, up from $47.4 billion as of April 2019. While there is adequate coin in the economy, the slowed pace of circulation has meant that sufficient quantities of coin are not readily available where needed.”
To encourage the increase in circulation of coins in the United States, members of the aforementioned Coin Task Force will represent all major participants in the supply chain of coins — including representatives from the following groups:
- United States Mint
- Federal Reserve Banks of the United States
- Armored Carriers
- American Bankers Association
- Independent Community Bankers Association
- National Association of Federal Credit Unions
- Coin Aggregator representatives
- Retail Trade Industry
“To ensure a fair and equitable distribution of existing coin inventory to all depository institutions, effective June 15, the Federal Reserve Banks and their coin distribution locations began to allocate available supplies of pennies, nickels, dimes, and quarters to depository institutions as a temporary measure”, according to this article from the Federal Reserve Banks of the United States. “The temporary coin allocation methodology is based on historical order volume by coin denomination and depository institution endpoint, and current U.S. Mint production levels. Order limits are unique by coin denomination and are the same across all Federal Reserve coin distribution locations. Limits will be reviewed and potentially revised based on national receipt levels, inventories, and Mint production.”
Summary
I rarely ever use actual money for transactions; so the shortage of coins theoretically has not affected me. In fact, I have been seeing more pennies, nickels, and dimes on the ground than usual…
…but if you have ever wanted to rid yourself of all of the loose change you have in your possession by either depositing them in your bank account or exchanging them for paper money — perhaps even for foreign currency — now may be the best time to do so, as one of the recommendations of the Federal Reserve Banks is for depository institutions to remove barriers to consumer deposits of loose and rolled coins in order to help replenish inventories of coins.
If you are traveling the United States and know you will need coins during your visit, ensure that you prepare in advance to attempt to secure enough coins for what you need.
That’s just my two cents, to coin a phrase…
All photographs ©2020 by Brian Cohen.
