The U.S. Mint is taking steps to alleviate coin shortages caused by the COVID-19 pandemic. In the second half of 2020, the Mint expects production increases to 1.35 billion coins per month that would add up to a projected total of 14.2 billion coins produced in 2020 according to Statista.
In June, the Federal Reserve announced coin shortages and limited distribution of all coin denominations to banks. There were two primary reasons for the shortages. State economic shutdowns that began in March to stem the spread of COVID-19 interrupted the normal flow of cash and coins in stores and restaurants. Second, due to COVID-19 safety precautions, the Mint operated with reduced production staffs at both the Philadelphia and Denver Mints that strike one, five, ten, and twenty-five cent coins for circulation.
Moving forward, the Mint has increased production of the four coin denominations at both Mint facilities. The Federal Reserve has said any spot shortages of coin would be temporary as the economy reopens and people start using cash and coin again in stores.
Coinstar CEO Jim Gaherity has said coin inventories in Europe have trended back to normal as those economies have opened up. Coinstar kiosks in grocery stores and banks help recirculate coins throughout the economy.
An increased demand for coins as the economy opens is welcome new says Americans for Common Cents Executive Director Mark Weller. There is a demand for cash, even its smallest denominations like the penny, according to Weller. Federal Reserve data shows that cash continues to be used heavily for for-value payment, representing almost 50% of payments under $10 and 80% of payments below $25.
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