U.S. Faces Another Coin Shortage
America is preparing to break open its piggy banks as the nation once again faces a widespread coin shortage. Fears of a return to the cash struggles of 2020—which led the U.S. Mint to increase coin production—have prompted a collective of trade associations to petition the Treasury Department for greater efforts to convince the public to take action.
Associations* representing banks, grocery stores, retail outlets, truck stops and more have sent a letter to the U.S. Department of the Treasury urging it to ‘reinvigorate coin circulation’. They point to a package of measures taken in 2020, encouraging consumers to use exact change when making cash purchases, and to deposit coins with their financial institutions or redeem them at coin kiosks.
If retailers are not able to offer change for cash purchases, consumers who rely on cash will be vulnerable.
The letter notes that this action resulted in a significant uptick in circulating coins by late 2020 and early 2021, such that the Federal Reserve was able to remove the restrictions it had placed on coin orders from financial institutions.
Coins are now being rationed once again, with the problem being blamed on a pandemic-related slowdown in the small transactions that typically generate change. Part of this is due to the misguided notion that cash presents a high risk of spreading the SARS-CoV-2 virus, which has been categorically proven incorrect, with multiple studies concluding cash is safe, and the United States Centers for Disease Control and Prevention (CDC) saying in its guidance that the risk posed by all surfaces is low.
* The letter is signed by the American Bankers Association, Credit Union National Association, FMI – The Food Industry Association, Independent Community Bankers of America, National Association of Convenience Stores, National Association of Federally-Insured Credit Unions, NATSO Representing America’s Travel Plazas and Truck Stops, National Grocers Association, Retail Industry Leaders Association, and SIGMA America’s Leading Fuel Marketers