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What financial institutions can do right now to improve coin circulation in the United States

The COVID-19 pandemic has significantly disrupted the supply chain and normal circulation patterns for U.S. coin. Throughout the pandemic, deposits of coin from businesses, coin recyclers and the public to financial institutions (including commercial banks, community banks, credit unions and thrifts) have dropped by more than half. These deposits are a major source of Federal Reserve inventory replenishment for circulation. Additionally, the U.S. Mint, as the nation’s issuing authority and producer of new coin, was operating under reduced coin production levels at the onset of the pandemic to incorporate measures to keep their employees safe. Further, the demand for coin for transactional purposes is rising to more normal levels as businesses across the country begin to reopen.

In this case, it is important to note that the coin supply chain disruption does not affect paper currency. It is also not a shortage of coin, but rather a disruption in circulation caused by the contributing factors related to the pandemic, noted above. The Federal Reserve and the U.S. Mint are taking steps to normalize coin circulation, but the health of the coin supply chain depends on all of its participants.

Returning to normal patterns of coin circulation

A return to normal circulation levels across the supply chain is most likely to happen when consumers begin to return coin through coin recyclers, retailers and financial institutions. This will lead to coin recyclers returning coin from circulation to financial institutions, and subsequently, to Federal Reserve Banks. This article provides a few examples of actions that financial institutions can take to help the U.S. economy return to normal coin circulation levels:

  • Order only what you need to meet demand of your customers. The Federal Reserve encourages financial institutions to order only the coin needed within current allocated limits to meet the immediate demand of customers.
  • Make it easy for customers to deposit coin. Though some financial institutions already have longstanding customer service policies in place to accept coins from the public, the Federal Reserve encourages all financial institutions to reduce or eliminate any barriers the public may encounter when attempting to deposit coins. By making it easy for consumers to deposit coins, financial institutions will promote coin circulation – one example of this is accepting coins that are not wrapped.
  • Pay out as much coin as possible. In normal times, wholesale and retail distributors tend to have up to a month’s worth of payable inventory on hand. Given the current lack of coin movement throughout the supply chain resulting from the pandemic, the Federal Reserve encourages all distributors of coin to pay out as much coin as possible keeping only enough working inventory to ensure fair and equitable access to your customers.
  • Encourage your employees to cash in their coin. Since the coin issues began, the Federal Reserve has spread the news to our employees across the country encouraging them to bring in their piggy banks and coin jars to their local financial institution, spend it at their local retailer or cash coin in at a coin-recycling machine. Our employees began to post images of themselves depositing coin on their personal social media accounts using #getcoinmoving. Every little bit helps - financial institutions can join the movement with their own employees.

The Federal Reserve, in close cooperation with the U.S. Mint and others in the coin supply chain, remains committed to overcoming the current disruption in coin circulation and is continuing to closely monitor and take action, as needed, in support of the U.S. economy.

On June 30, the Federal Reserve announced the establishment of the U.S. Coin Task Force, a limited-scope and limited-duration task force that will work to identify, implement and promote actions to address COVID-19-related disruptions to normal coin circulation. On August 3, the task force announced its recommendations to address the coin circulation issues. For more information about the task force, visit the website.

We appreciate the support of our coin supply chain partners as we respond to these challenges together.