America’s Coin Shortage
Updated: Aug 8, 2020
I was waiting in line at a drive-thru recently when I saw this sign:
"Due to a national shortage in coins, we will only be accepting card payments unless you have exact change. Sorry for any inconvenience."
Until that moment I had no idea there could even be a coin shortage. But then again, this is 2020 and I'm learning that anything is possible.
I have to admit I was skeptical, so I did a little Google-ing. Turns out it's a two-part problem: reduced circulation and production. And yes, we can blame Covid-19 for both.
Coins aren’t being circulated
Since the shut down, more people have switched to using debit and credit cards almost exclusively to avoid unnecessary contact with germs. And many businesses that typically keep coins moving, like restaurants and retail stores, were forced to close. Both have resulted in fewer coins being deposited into U.S. financial institutions.
Fewer coins are being produced
Like all businesses, the U.S. Mint had to reduce on-site staff to help limit their staff's exposure to Covid-19. These precautions have significantly reduced coin production.
How will the coin shortage be corrected?
On June 15th, the Federal Reserve put a limit on how many coins were allotted to banks and financial institutions. The Fed and Department of the Treasury are expected to release corrective plans by early this month. In the meantime, the U.S. Mint has resumed full operations and plans to release 19.8 billion coins by the end of the year—7.8 billion more coins than last year.
Are piggy banks a realistic stop gap?
If you've got a rainy day fund some say breaking open your piggy bank and paying with exact change or making a bank deposit of your extra coins are two ways to bolster the shortage.
Stimulating the coin economy will also help those who are unbanked as they rely on cash for everyday purchases.
What will America be short on next?