Hold onto your pocket change; there’s a coin shortage in America, officials say
Pocket change now carries a new meaning in 2020. There’s a coin shortage in America.
The coronavirus pandemic has disrupted supply chains and normal circulation patterns of pennies, nickels, dimes and quarters after businesses and banks shut their doors to curb the spread of COVID-19, according to a June 11 statement by the Federal Reserve.
As of Monday, coins are being allocated evenly across all “depository institutions” to “ensure a fair and equitable distribution,” the statement said. The temporary order is based on past order volumes and on current coin production levels.
“The Federal Reserve is working on several fronts to mitigate the effects of low coin inventories,” the statement said. “Although the Federal Reserve is confident that the coin inventory issues will resolve once the economy opens more broadly and the coin supply chain returns to normal circulation patterns, we recognize that these measures alone will not be enough to resolve near‐term issues.”
The issue recently came to light when U.S. Rep. John Rose of Tennessee mentioned Wednesday in a virtual hearing with the House Financial Services Committee that one of the bank owners in his district told him they would be receiving “a small portion of their weekly order of coinage.”
The Tennessee banker said he will likely run out of coins by the end of the week, according to Rose.
“After some preliminary research, I found that many other banks across my district are having the same operational challenge,” Rose said in the hearing. “My fear is that customers who use these banks will react very poorly, and I know that we all don’t want to wake up to two headlines in the near future, such as ‘banks out of money.’”
In response, Federal Reserve Chairman Jerome Powell said the “flow of coins through the economy” has come to a standstill following closures.
“The places where you go to give your coins, and get credit at the store and get cash — you know, folding money — those have not been working. Stores have been closed,” Powell said during the hearing. “So the whole system of flow has kind of, had come to a stop.”
When asked if this was “indicative of a larger issue,” Powell said he believes “it’s just temporary.”
Rose went on to suggest Powell should issue “more robust guidance for banks... (because) they don’t know what to tell their customers.”
In the meantime, The Federal Reserve is working with the U.S. Mint to maximize coin production capacity, “and encouraging depository institutions to order only the coin they need to meet near-term customer demand,” according to the statement.
This story was originally published June 18, 2020 at 4:25 PM.
