The change in your cup holder could help solve one of the Federal Reserve’s biggest problems: the disruption of the normal circulation of coinage (commonly referred to as the U.S. coin shortage).
In fact, the Federal Reserve recently introduced the U.S. Coin Task Force, which issued a statement on July 24 that describes the consequences of the slowdown:
“The weak circulation affects most everyone, but the hardest hit are small cash-dependent businesses and those who are least well off,” said Hannah L. Walker, a task force member and vice president with FMI – The Food Industry Association. “For millions of Americans, cash is the only form of payment.”
Persons Banking Company wants you to understand this disruption; keep reading to learn three things you probably don’t know about the U.S. coin circulation problem.
One: It’s Not a Coin Shortage
Did you know that there is approximately $48 billion in coin already in circulation?
So, the country isn’t really experiencing coin shortage–just a lack of circulation.
“As people have changed their spending habits, and coin-intensive businesses and financial institutions’ lobbies have been less accessible, the nation’s coin is pooling in change jars, in car cup holders, and in shuttered business,” the Task Force statement reads.
Two: Why It’s a Problem
While there is plenty of coin to go around, the slow down of circulation means there isn’t enough change available where needed.
Since the first link in the coin supply chain (think retail shops, bank branches, and laundromats) are closed to stop the spread of COVID-19, the circulation of coinage has been significantly disrupted. This has left many businesses without the ability to make change.
Related: How to Support Small Businesses During the COVID-19 Pandemic
In fact, many businesses, including Kroger, CVS, and Walmart, are asking its customers to pay with exact change or cards, according to this Fortune article.
And several Chick Fil A franchises have offered customers free food in exchange for $10 worth of coin.
So, what’s the plan?
According to a June 30 Federal Reserve press release, the institution is working with the U.S. Mint, Armored Carriers, American Bankers Association, the Independent Community Bankers Association, and more, to minimize supply constraints and maximize coin production capacity.
3: You Can Help
The Task Force is urging the American public to do the following to help increase coin circulation:
- Use your spare change
- Deposit your coin at your financial institution of choice
- Redeem coin at coin kiosks
- Use the hashtag #getcoinmoving in social media posts to promote awareness and understanding of the coin circulation issue
The Task Force, however, encourages Americans to use their coin safely by following CDC recommendations when visiting retailers, small businesses, banks, grocery stores, and credit unions.
Summing Up the Coin Shortage
- The Federal Reserve recently introduced the U.S. Coin Task Force to help increase the circulation of coin in the United States.
- While there is about $48 billion in coin in circulation, the supply chain is disrupted due to the COVID-19 pandemic.
- There isn’t actually a coin shortage – just a disruption in the supply chain, which makes it difficult for businesses to make change for cash-based transactions.
- You can help by using your spare change, depositing coin at your bank, and using the hashtag #getcoinmoving.