Why is There a Coin Shortage in the U.S.?

There is a coin shortage in the U.S. because of the coronavirus crisis. Nationwide, there are fewer coins being spent as businesses remain closed under lockdown restrictions. Meanwhile, the U.S. Mint's production has slowed because fewer employees are working as part of ongoing social distancing measures.

Fewer Coins in Circulation

One reason for a coin shortage in the U.S. is that there are fewer coins in circulation. Due to lockdown restrictions and businesses being closed, people have been spending less money since the coronavirus crisis began, which means spending fewer coins.

U.S. Federal Reserve Chair Jerome Powell said on June 17: "What's happened is that with the partial closure of the economy, the flow of coins through the economy has... kind of stopped.

"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."

Stores like laundromats and gas stations have been particularly affected by the coin shortage. Some stores are asking customers to pay with the exact amount of cash, or use card so that they don't have to give out the scarce amount of change they have. Additionally, some stores, like Wawa, are exchanging coins for bills.

U.S. Coins
New U.S. nickels are shown on display at an unveiling ceremony January 12, 2006 in Washington, D.C. There is a national coin shortage due to the coronavirus crisis, as fewer coins are in circulation and the U.S. Mint has slowed production for safety reasons. Getty/Alex Wong

U.S. Mint Production Slowed

Due to the coronavirus crisis, the U.S. Mint has decreased the number of coins it produces, due to measures put in place to protects its employees.

The Federal Reserve manages coin inventory and distributes coins depository institutions like banks and credit unions. As businesses begin to reopen, orders from these depository institutions have begun to increase, causing the Federal Reserve's coin inventory to reduce to below normal levels.

What will happen next?

In a press release issued on June 11, the Federal Reserve said: "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."

To counteract the coin shortage, the Federal Reserve will work with the U.S. Mint to maximize coin production capacity and will encourage depository institutions to only order the coins they need in the short term to meet customer demand.

Since June 15, the Federal Reserve Banks have been allocating the available coins to depository institutions based on historical order volume by coin denomination.

Earlier this month, the Federal Reserve convened a U.S. Coin Task Force made up of industry leaders from the U.S. Mint, Federal Reserve, Armored Carriers, American Bankers Association, Independent Community Bankers Association, National Association of Federal Credit Unions, Coin Aggregator representatives, and the Retail Trade Industry.

They will work together to "identify, implement, and promote actions to reduce the consequence and duration of COVID-19 related disruptions to normal coin circulation."

The first set of recommendations is expected at the end of July, and in the meantime, the Federal Reserve wants to promote the circulation of coins with the hashtag #getcoinmoving on social media.