The coronavirus pandemic has led to a huge shortage of coins in the United States, creating problems for people who depend on cash for everyday purchases. Due to the virus outbreak, many businesses have started asking for payment through cards, e-wallets, or exact change if possible, as a precautionary measure.
Experts believe that it is more of a circulation problem than an overall shortage. On June 17, US Federal Reserve Chairman Jerome Powell had reportedly said that the flow of coins through has stopped due to the partial closure of economy. He added that the places exchanging coins for credit and cash have not been working and the whole system of flow has stopped as stores remain closed.
Later, US Federal Reserve elaborated on the issue of coins shortage in its “Most Frequently Asked Questions” section, saying business and bank closures associated with the COVID-19 pandemic have significantly disrupted the supply chain and normal circulation patterns for US coins. It asserted that there is an adequate overall amount of coins in the economy but the slowed pace of circulation has reduced available inventories in some areas of the country.
“The Federal Reserve is working with the US Mint and others in the industry on solutions,” said the central bank.
The bank revealed that a temporary cap has been imposed on the orders depository institutions place for coins with the Federal Reserve to ensure that the current supply is fairly distributed. Additionally, a US Coin Task Force has been formed to identify, implement, and promote actions to address disruptions to coin circulation. The Federal Reserve said that the coin inventory issues will resolve once the economy opens more broadly and the coin supply chain returns to normal circulation patterns
“As the economy recovers and businesses reopen, more coins will flow back into retail and banking channels and eventually into the Federal Reserve, which should allow for the rebuilding of coin inventories,” it added.