All About Coins - Why Is There a Shortage?

These difficult pandemic times have not only effected the health system and work, but it has also effected the circulation of money. Imagine buying a product from your local store and you cannot get your coin change.

This is where businesses are getting problems because they can’t get the amount of coin money they ask from banks. Money must constantly move from one point to another, but if one level of the cycle is cut, then there is a shortage. 


So that’s what’s happening with the Federal Reserve. Have you been affected by this coin shortage lately? Read on to learn more about the coin shortage that is happening right now.

All About Coins - Why Is There a Shortage?

How the Coin System Works

The Federal Reserve is the one responsible for distributing money (coins inclusive) to your local banks. Also, places, like laundromats and transit hubs, where people exchange coins for credit or cash have been closed due to the pandemic

These exchange places gather coins and take them to the banks, and they send them to the Federal Reserve. Depending on the amount of money in circulation, the Federal Reserve determines how much to release or withhold. 


Money is supposed to flow continuously in the economy. It’s an endless cycle that is affected by a shortage at any one point. In this case, because people have not been exchanging their coins at the exchange centers, there is a shortage. 

It has been said that coin deposits at banks have decreased by 50% during the pandemic. This means even the amount of coins the Federal Reserve releases to the banks is limited.

How it Affects People

You might be wondering how all this affects you. For instance, if your local store requests for $1,000 in coins from the bank, it won’t get it because even the banks don’t have it. 


Also, it is not only that store that needs the coins; there are other hundreds of local businesses that need coins for change. Therefore, the banks will give out less than what is asked so that other businesses can get too.

You will realize this problem when you buy a product at your local store and fail to get the change because they don’t have the coins. You are either required to pay using a credit card or have the exact money. This wasn’t the case before the pandemic.


All About Coins - Why Is There a Shortage?

There is already a 70% increase in the amount of currency in circulation. It’s understandable since people had to prepare for the worst when the pandemic hit. 

If you have been affected by this coin shortage, then start releasing some of this money back into circulation to solve it. How? You may ask. The next time you go to buy something, pay with coins. 

Take that jar of coins that is full and use it to buy groceries. This way, you are part of the solution rather than lamenting about it without taking action.

Also, the U.S Coin Task Force has been established and is going to look into this problem. Since it’s a group of professionals, they can look into the problem at hand and devise way forward.


This pandemic has affected governments and economies at large. It has indeed introduced us to the “new normal”. Things are not the same, and this includes the coin shortage. 

Local businesses cannot give small change because they don’t have coins. This is due to a disruption in the continuous cycle of money. People have chosen to keep money (coins) instead of using it and in the process, facilitating the cycle.

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