A new “crisis” stemming from the coronavirus pandemic is (ready for this?) a coin shortage, observes Grumpy Editor.
The problem stems from shuttered businesses with the economy going to a shutdown mode causing fewer in-person transactions and slowing recirculation of coins.
Social distancing and other safety measures slowed production of coins at the U.S. Mint. Also, with people holed up at home, fewer coins are making their way from customers to banks, coin-sorting kiosks and stores' cash registers.
“With the partial closure of the economy, the flow of coins through the economy has kind of stopped,” said Federal Reserve Chairman Jerome Powell before the U.S. House Committee on Financial Services last month. “Stores have been closed, so the whole system of flow has come to a stop. We’re well aware of this and we’re working with the reserve banks, and as the economy reopens we’re seeing coins begin to move around again," he adds.
Some businesses are grappling with the shortfall of coins, asking customers to pay with exact change, if possible. Smith’s, the grocery chain, said, “Like many retailers and businesses, we are adjusting to the temporary shortage in several ways while still accepting cash.”
On the banking side, Wells Fargo said it is “actively managing our coin inventory and working with customers to meet their coin needs to the extent possible after the Federal Reserve put limitations on coin deliveries to all financial institutions nationwide.”
The Fed said it would convene a U.S. Coin Task Force to address the matter.
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