Americans Want Change. Private Mints Are the Solution.

“Two years after a lack of spending brought on by the COVID-19 pandemic caused a coin shortage, American retailers still find themselves short on change.

In March, industry representatives called on Treasury Secretary Janet Yellen for help as the shortage lingers, but they’re unlikely to find relief. The federal government has been steadfast in its commitment to present only short-term solutions, like rationing coins or pushing social media campaigns. If the government actually wanted to solve the problem, it would allow the private sector to produce its own coins.  

In 2020, the combination of government-mandated lockdowns, consumer health concerns, and a shutdown of the U.S. Mint brought the circulation of coins to all but a grinding halt. Though the economy at large is much better than it was in summer 2020, the circulation of coins has struggled to recover.

While some businesses have chosen to break away from cash transactions altogether in response to the shortage, others don’t have that luxury. Brian Wallace, chief executive of the Coin Laundry Association said, “[If] we can’t make change, we can’t make money.” That reality became clear when some business owners began driving for hours to find available coins.

Consumers have been hit hard too. For the 7.1 million unbanked and 24.2 million underbanked households in America, cash is one of the most important resources they have for making purchases. The coin shortage has locked many of them out of the economy or caused them to incur new costs on top of current inflation.  

The Federal Reserve’s main response has been to ration coins “based on historical order volume by coin denomination and depository institution endpoint, and current U.S. Mint production levels.” The U.S. Mint, through advertisements and social media campaigns, also asked the public to “pay with exact change and return any spare change to circulation by depositing coins, exchanging them for bills at a financial institution or taking them to a coin redemption kiosk.” And a “U.S. Coin Task Force” was convened to monitor the ongoing shortage. At best, these are merely short term solutions.”

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