HOUSTON – Messages on social media are circulating about the coin shortage, with people suggesting that the shortage is fake and an effort to move toward a cashless society, and even potentially a “One-World Government” or “New World Order” feared in the Bible’s Book of Revelation as a harbinger to the end of the world.
Here are a couple of examples of those kinds of posts circulating online right now.
While knowing whether the end of the world is coming is something we’ll leave to others, the origins and trajectory of the coin shortage is a matter of reporting.
How did the coin shortage happen?
The coin shortage is real and it’s something the nation is grappling with as the pandemic continues.
According to a news release from the Federal Reserve, the issue is that the coins are not where they need to be right now, as circulation is down due to the pandemic with many coin-circulating businesses, such as transit and laundromats, closed down to stem the spread of the virus.
“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.”Federal Reserve on June 30, 2020
In addition to closures, other behavioral issues may have contributed to the coin shortage.
Daniel Soques, an assistant professor of economics at the University of North Carolina Wilmington, told NBC News that it was a “perfect storm” of circumstances born out of the pandemic, that, in addition to closures, people feared getting the coronavirus by touching currency. NBC News noted that Coinstar, which operates about 22,000 coin-cashing kiosks nationwide, said volume slowed amid state and city lockdowns. New coin production was also hampered at the U.S. Mint’s production facilities in March and April. Also, Soques added, when the economy started tanking with record losses in the spring, it was enough for some people to “start hoarding coins and hoarding money in general.”
What’s being done about it now?
Some businesses have turned to rounding to dollar amounts or encouraging cards only for payment.
Here are some snapshots of those methods at work from social media:
I just saw this at the Wendy's drive-thru. What's this coin shortage all about? pic.twitter.com/oMCkwLNXQJ— Jake Morphonios 🌎 www.blackstoneintel.com (@morphonios) July 13, 2020
This week I saw a sign at a Starbucks an hour outside of dc and no idea about any coin shortage. pic.twitter.com/aPmLswRgNf— Scott Talan (@talan) July 14, 2020
The Federal Reserve has created a task force to help address the problem. The Federal Reserve formed the U.S. Coin Task Force in late June.
- As indicated in that release, there is an active effort get coins circulating again. The U.S. Coin Task Force is tasked with “work(ing) together to identify, implement, and promote actions to reduce the consequence and duration of COVID-19 related disruptions to normal coin circulation.”
- The U.S. Coin Task Force is expected to come up with a set of recommendations to get coins moving again “by the end of July.”
- The task force also created the hashtag #getcoinmoving to promote the idea on social media.
🪙 Do you have spare change?— LoneStarCapitalBank (@LSCBank) July 14, 2020
Our country is currently experiencing a coin shortage. Help us get coins back in circulation by cashing in any spare change you may have! #getcoinmoving #texasbankers pic.twitter.com/v9UEYJVbMG
Did you know that Lewistown Office of MCS Bank has a coin counter? 😲 Better yet, customers from any of our branches 🏦 can drop their coin off and get it counted for FREE!— MCS Bank (@McsBank) July 21, 2020
Bring us your stash 💰 and we’ll turn it into CASH 💵! #getcoinmoving pic.twitter.com/cZSXb30OeO
- The Federal Reserve noted that “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.”
When will things get better when it comes to coins?
In a statement to NBC News, the Fed said it “is confident that the coin inventory issues will resolve once the economy opens more broadly and the coin supply chain returns to normal circulation patterns,” although it “recognizes that these measures alone will not be enough to resolve near‐term issues.”
Fed Chair Jerome Powell acknowledged at a House Financial Services Committee hearing last month that banks are also suffering through the lack of a “flow of coins.”
"We're working with the Mint to increase supply, and we're working with the Reserve banks to get that supply where it needs to be," Powell said. "So we think it's a temporary situation."
But will measures to mitigate the shortage actually be temporary -- or is a cashless society where we’re headed?
In the United States, cards are already king, with debit cards the most used financial instrument, according to a Federal Reserve study based on a survey by the Federal Reserve that was published in 2019 and based on a three-day survey of payments in October 2018. However, cash is by no means going the way of the Dodo bird. Consumers used cash in 26 percent of transactions, though down from 30 percent in 2017. Check out the full study here.
Have you seen these posts on social media? What questions do you have about them? Let us know in the comments.
To read NBC News’ full report on the coin shortage, go here.