By: Phillip Heilman
It’s never a bad time to visit a VyStar Credit Union branch and turn your loose change into cash, but now might be a better time than ever.
One of the consequences that has trickled down as a result of the ongoing coronavirus pandemic is a coin shortage that has impacted some areas of the U.S. this summer. The supply disruption has not affected VyStar, but it has resulted in many businesses requesting that customers pay with a debit or credit card or exact change. It has even been the subject of viral jokes on the internet that poke fun at how the “government does not make cents.”
While everyone loves a good meme, the reality of the situation is the Federal Reserve is closely monitoring what is going on and looking for solutions. So, how did we get here?
As COVID-19 forced many businesses and banks to either temporarily or permanently close, the supply chain and normal circulation patterns for coins was disrupted. Also, the U.S. Mint cut some resources as a result of the pandemic, which impacted its ability to produce coins.
Overall, the country still has a good amount of coins, but neighborhoods that have been hit the hardest by the pandemic have also seen a decrease in coins. It’s kind of like how blood circulates through the human body. If you have a health issue that disrupts your circulation, one part of your body might not be getting enough oxygen-enriched blood even if there is enough to go around. That’s not good for your arms or legs — and a lack of coins is not good for restaurants, retailers and other small businesses that depend on having them.
Ensuring that coins circulate properly is really the crux of the issue. In a June 30 news release, the Federal Reserve explained that the U.S. Treasury estimated the total value of coins circulating in April was $47.8 billion, an increase of $400 million from 2019. The release from the Fed detailed the actual problem as being a “slowed pace of circulation” of coins, not the actual number of coins in the economy.
Steven Mnuchin, the Secretary of the Treasury, recently tweeted as much. Mnuchin said: “If you have extra coins at home, please use them to make purchases — or deposit them at the bank or exchange them for cash. Help get coins moving!”
VyStar makes it easy to turn your loose change into cash. All you have to do is visit any branch with your spare change, run it through our coin counting machine and receive a receipt with the total amount. Then, you can trade it in for cash or deposit it into your VyStar account.
The Fed has also taken action. It has begun working with the U.S. Mint to ensure the coin shortage — or maybe more accurately, displacement — does not become a crippling issue as businesses continue to reopen in the coming weeks and months.
One of the initial steps was a temporary cap being placed on the orders from depository institutions for coins through the Federal Reserve to make sure the current supply is fairly distributed. And since mid-June, the U.S. Mint has been producing as many coins as it normally would. That meant minting almost 1.6 billion coins in June and more than 1.65 billion coins per month for the rest of 2020.
Also, a U.S. Coin Task Force was formed in late June to identify, implement and promote ways to address disruptions to coin circulation. If that sounds like the next Netflix series starring Steve Carrell, it’s not … for now.
As more and more businesses reopen and the economy recovers, the coin shortage should mostly be resolved. More coins will go back into normal retail and banking networks and eventually into Federal Reserve inventories.
Still, it is worth being mindful of these issues, especially when a business or retailer asks that you use a contactless payment or provide exact change. That could alleviate a lot of stress on their end and help restore our coin balance more quickly.
And that’s just good cents.
The information in this blog consists of the opinions and ideas of the author alone and should be used for informational purposes only. VyStar Credit Union disclaims any liability for decisions you make based on the information provided.