The impact of COVID-19 has come down on the world in a number of ways, affecting the way humans interact with one another. Healthwise, we are more fragile than a number of other countries right now. In addition, the socio-economic impact as well as the impact financially has really taken a toll on the American people. One of those ways has resulted in the shortage of United States coins.
If you really think about it, it makes sense. Businesses were shut down and lockdowns were mandatory across the nation in earlier months. In some cases, some were never recovered. While the fight against the virus still continues to this day, it’s impact has reached the very coins you find in your wallets and pockets. People are now spending less and businesses are still finding themselves to be closed.
According to an article by Newsweek, they quoted United States Federal Reserve Chair Jerome Powell on June 17th as saying that “the flow of coins through the economy has...kind of stopped.” He also goes on to say that “the places where you go to give your coins and get credit, cash...those have not been working. Stores have been closed. So the whole system of flow has kind of come to a stop. We’re well aware of this.”
The other reason for the shortage is the social distancing guidelines the United States Mint themselves have kept up with for their employees. Their production has slowed, and even shut down at some point when you are looking at West Point and San Francisco. This has resulted in a decrease of coins being produced in order for the Mint to safely keep their employees working.
The Federal Reserve themselves issued a press release on June 11th that said the following: “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 Mint, in conjunction with the Federal Reserve, has been working to augment coin production capacity. They have also worked to embolden depository institutions to only order what they need during this difficult time.
While the number of cases has increased in a number of states across the country, only time will tell how this coin shortage will pan out in the long term. Some businesses have relayed this message from the Federal Reserve, posting signs detailing and encouraging customers to use their cards as a means of transaction.
The Federal Reserve has been allotting coins to institutions based on their history in order volume by coin denomination since June 15th.
Source: Newsweek
