2021 Strategic Allocation of Federal Reserve Coin Inventories
April 28, 2021
The Federal Reserve continues efforts to manage the distribution of the Federal Reserve’s coin inventory and new coin produced by the U.S. Mint in a fair and equitable manner. Our focus is on ensuring that businesses and consumers continue to have ready access to U.S. coin during the COVID-19 pandemic. To meet increased demand for coin fairly and equitably across all depository institution (DI) customers, the Federal Reserve Banks will begin to allocate coin in DI orders for dimes and quarters, beginning with orders placed for pick-up on Monday, May 3, 2021.
Why we are allocating coin again
After a relatively stable first quarter of 2021, coin orders from DIs began to increase in March, with the most dramatic increase seen in the first two weeks of April. In addition, coin deposits to the Reserve Banks have been on a slow decline since January. What initially appeared to be the normal seasonal increase in coin orders typical in the Spring has developed into a sustained trend that significantly exceeds typical seasonal patterns. The U.S. Mint continues to produce new coins at increased production levels; however, increased demand from DIs is outpacing U.S. Mint production and resupply available from low rates of deposits, resulting in the Federal Reserve’s coin inventory being reduced to below normal levels.
How coin allocation works
- The coin allocation methodology is based on three factors: 1) recent order volume by coin denomination and DI endpoint; 2) current U.S. Mint coin production levels; and 3) deposit levels.
- All endpoints1 are placed into Small, Medium, Large, Extra-large, and Extra-extra-large endpoint groups. These endpoint assignments remain the same as they were at the end of 2020, and the Reserve Banks will continue to honor the adjusted assignments from 2020.
- For endpoints that were not assigned groupings in 2020 because they are new endpoints or did not order a particular denomination, we will use the latest available order data set to identify the appropriate endpoint assignment for each denomination.
- Coin order limits are unique by coin denomination and are based on available inventory.
- At this time, order limits are applied to dimes and quarters only. While no order limits are placed on pennies and nickels, we are paying close attention to our inventories and to order and deposit activity for these denominations.
- On April 28, the Federal Reserve sent a detailed communication to all our DI customers detailing allocation amounts for endpoint groups and how to locate your endpoint(s)’ weekly allocation limit in the FedCash Services via the FedLine Web access solution.
What depository institutions and consumers can do to improve the situation
We ask all DIs to order only what they need to meet near-term demand and to deposit any excess coin to the Federal Reserve. In addition, we strongly encourage you to assess your inventories and deposit excess coin to the Federal Reserve as soon as possible or offer excess to exchange or sell to other DIs.
Consumers can help by spending their coin, depositing it with local banks or using coin recycling machines.
Background on coin allocation
The Federal Reserve’s coin allocation program began on June 15, 2020. Industry efforts to improve coin circulation helped to #getcoinmoving (Off-site), allowing the Federal Reserve to increase coin allocation levels seven times following June 2020 (July 20, August 10, August 31, September 14, October 19, November 16, and December 7) and to ultimately suspend allocations for all coin denominations in January 2021.
The Federal Reserve’s priority remains to distribute as much coin as fairly and equitably as possible into the economy while maintaining a working inventory for as long as this coin circulation situation persists. We are committed to reviewing coin allocation levels frequently or when inventory levels warrant a change. We will continue to monitor U.S. Mint production, coin deposits and orders, and Federal Reserve inventories in our review and adjust allocation limits based on DI deposits and the U.S. Mint’s ability to produce new coin.
Service and Support
If you have questions, please contact your local FedCash Services customer support representative or your Federal Reserve account executive. For a complete list of customer support contacts for your institution, please visit the Contact page.
1An endpoint is an institution's head office or branch office, any cash operation center, or vault operated by — or on behalf of — an institution, or an armored carrier used by the institution to provide Cash Services that has been assigned a four-digit endpoint identifier by the Federal Reserve Bank for purposes of obtaining Cash Services.