Federal Reserve Convenes U.S. Coin Task Force with Industry Partners
June 30, 2020
The Federal Reserve continues efforts to mitigate the effects of low coin inventories caused by the COVID-19 pandemic. In order to ensure the equitable distribution of Federal Reserve coin inventory and new coin production by the U.S. Mint, which is the issuing authority for U.S. coin, the Federal Reserve announced the Strategic Allocation of Coin Inventories on June 11. Over the last two weeks, Federal Reserve Banks and coin terminals implemented this strategy, capping coin orders and allocating coin for all Federal Reserve FedCash® Services customers.
The primary issue with coin is a dramatic deceleration of coin circulation through the supply chain. As of April 2020, the U.S. Treasury estimates that the total value of coin in circulation is $47.8 billion, up from $47.4 billion as of April 2019. While there is adequate coin in the economy, the slowed pace of circulation has meant that sufficient quantities of coin are not readily available where needed. With establishments like retail shops, bank branches, transit authorities and laundromats closed, the typical places where coin enters our society have slowed or even stopped the normal circulation of coin. The coin supply chain includes many participants, from the U.S. Mint who produces new coin, to the Federal Reserve who distributes coin on the U.S. Mint’s behalf, to armored carriers, banks, retailers and consumers, all of whom have a role to play in helping to resolve this issue.
The Federal Reserve is working on many fronts with our industry partners, including the U.S. Mint, to minimize supply constraints and maximize coin production capacity. We are encouraging depository institutions to order only the coin they need to meet near-term customer demand and to remove barriers to customer coin deposits. This communication is to inform all Federal Reserve Financial Services customers of the latest developments in the Federal Reserve’s efforts to recharge the circulation of coin.
U.S. Coin Task Force Established
In early July, the Federal Reserve will convene a group of industry leaders for a limited-scope, limited duration task force, the U.S. Coin Task Force, to work together to identify, implement, and promote actions to reduce the consequence and duration of COVID-19 related disruptions to normal coin circulation.
Industry Collaboration to Get Coin Moving
Task force members will represent all major participants in the coin supply chain, including representatives from the following groups:
- Unites States Mint
- Federal Reserve
- Armored Carriers
- American Bankers Association
- Independent Community Bankers Association
- National Association of Federal Credit Unions
- Coin Aggregator representatives
- Retail Trade Industry
The U.S. Coin Task Force will convene in early July with the goal of completing a first set of recommendations by the end of July. At the end of this first phase, the group will share its progress and evaluate the benefits of continuing the task force. In addition, coin industry partners can encourage the use of social media to promote the circulation of coin using the hashtag #getcoinmoving. The coin circulation issue is national in scale. While the task force will be focused on identifying actionable steps that supply chain partners can take to address the issue, it is clear that it will take all of our collective efforts to get coin moving again.
We appreciate everyone’s commitment and support in this effort.