Mint, Fed team to battle coin shortage brought on by COVID-19 pandemic
- Published: Jun 26, 2020, 11 AM
The Federal Reserve’s Cash Product Office has partnered with the U.S. Mint to alleviate any coin shortages and distribution problems with circulating U.S. coins caused by the COVID-19 pandemic.
The U.S. Mint has beefed up its production staffs at both the Philadelphia and Denver Mints that strike Lincoln cents, Jefferson 5-cent coins, Roosevelt dimes and America the Beautiful quarter dollars for circulation, and also increased production of the four denominations at both facilities.
According to a June 18 U.S. Mint explanation provided to Coin World by spokesman Michael White, “In normal circumstances, retail transactions and coin recyclers return a significant amount of coins to circulation on a daily basis.
“However, the precautions taken to slow the spread of the virus have reduced retail sales activity and significantly decreased deposits from third-party coin processors, resulting in increased orders for newly minted coins produced by the United States Mint.
“Throughout the public health challenge, the Mint has continued to meet its essential mission of manufacturing coins to facilitate national commerce.
“At the same time, the Mint continues to take all appropriate steps to safeguard the health and safety of our workforce.
“Acting with an abundance of caution, the Mint has gradually and safely increased staffing at its circulating coin production facilities in Denver and Philadelphia, and returned to full production staffing levels at both facilities on June 15.
“The Mint will continue to operate under mandatory Saturday overtime hours and voluntary Sunday overtime hours to help meet the demand for coinage. As the issuing authority for United States coinage, the Mint is partnering with the Federal Reserve’s Cash Product Office (CPO), which manages coin supply and inventory from a national perspective, to minimize potential coin shortages and ensure the health of our Nation’s circulating coin supply.”
Federal Reserve action
The Federal Reserve often shifts circulating coin inventories between contracted armored carrier terminals to alleviate regional shortages, but officials indicate the COVID-19 pandemic presents different challenges.
A temporary coin order allocation at all Federal Reserve Bank offices and Federal Reserve coin distribution locations was imposed by the Fed June 15.
“The COVID-19 pandemic has significantly disrupted the supply chain and normal circulation patterns for U.S. coin,” according to FRBservices.org. “In the past few months, coin deposits from depository institutions to the Federal Reserve have declined significantly and the U.S. Mint’s production of coin also decreased due to measures put in place to protect its employees.
“Federal Reserve coin orders from depository institutions have begun to increase as regions reopen, resulting in the Federal Reserve’s coin inventory being reduced to below normal levels.
“While the U.S. Mint is the issuing authority for coin, the Federal Reserve manages coin inventory and its distribution to depository institutions (including commercial banks, community banks, credit unions and thrifts) through Reserve Bank cash operations and offsite locations across the country operated by Federal Reserve vendors.”
The Fed is implementing a number of strategies to offset the low coin inventories.
“This includes managing the allocation of existing Fed inventories, working with the Mint, as issuing authority, to minimize coin supply constraints and maximize coin production capacity, and encouraging depository institutions to order only the coin they need to meet near-term customer demand,” according to the Fed. “Depository institutions also can help replenish inventories by removing barriers to consumer deposits of loose and rolled coins.
“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.”
MORE RELATED ARTICLES