As if 2020 wasn’t already bizarre and challenging enough, the U.S. Mint has announced a coin shortage in the United States. Through a public service announcement video released on YouTube on August 5, 2020, the Mint’s Director David J. Ryder asks the American public to “help get coins moving by using exact change when making purchases, taking your coins to financial institutions, or turning them in for cash at coin recycling kiosks.” Additionally, Ryder advises that people “remember to follow all health and safety guidelines when you are out spending or recycling your coins”.
Is There Really a Coin Shortage in the U.S.?
Not exactly. According to a recent Forbes article, Yiming Ma, an Associate Professor at the Columbia Business school describes it as, “A disruption is a better way to describe it. It’s reflecting the fact that, once circulation is resumed, these disruptions will ease out.”
The article states Ma also feels that “businesses that primarily take coins, such as laundromats, vending machines and car washes, likely stopped operating during the pandemic due to social distancing and stay-at-home measures. These businesses are usually key components in getting coins back to banks to redistribute back into the economy. Since they weren’t receiving coins, the flow of them back into the economy has been significantly reduced.”
To help the situation, in late June the Federal Reserve created a U.S. Coin Task Force to “mitigate the effects of low coin inventories caused by the COVID-19 pandemic.” The Task Force includes members from the U.S. Mint, the Federal Reserve, Armored Carriers, the American Bankers Association, the Independent Community Bankers Association, the National Association of Federal Credit Unions, Coin Aggregator representatives, and the Retail Trade Industry.
Is The Coin Shortage Worth Worrying About?
Yes and no. While much of the population won’t deeply feel the effects of a coin shortage in the U.S., those who are unbanked and underbanked will likely experience a much more significant impact.
According to a 2019 report from the Federal Reserve, 6% of adults are unbanked in the U.S. and an additional 16% of adults are underbanked, meaning “they have a bank account but also used an alternative financial service product.” This may take the form of utilizing money order, check cashing services, pawn shop loans, and payday loans, among others.
To help get coin distribution flowing again, you may want to dig around your couch cushions and finally take that change jar to the bank to turn it in. That way you can rest assured that you’re doing your part!