COVID-19 Coin Shortage?
June 18th, 2020Via: CNBC:
Federal Reserve Chairman Jerome Powell told Congress on Wednesday that the circulation of physical coinage has ground to a halt amid the coronavirus outbreak but that the central bank is working to fix the flow.
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The spread of Covid-19 across the U.S. over the first half of the year has led to a rise in contactless payments as more Americans shelter in place and shop online using PayPal or credit cards. But unprecedented, state-imposed business closures also resulted in a deceleration in the rate at which physical cash and coinage exchange hands.
Companies that generate a significant portion of their revenues in physical cash, including restaurants and convenience stores, would normally deposit their earnings at local banks. That regular activity, in conjunction with regular inflows of new money from U.S. mints, helps resupply the nation’s banks with coinage to then reallocate back into local circulation.
So when states like New York this spring ordered restaurants and other in-person commerce closed, the normal cycle of U.S. money slowed and failed to refresh banks per usual.
