Banks across the United States are facing a shortage of coins during coronavirus crisis, prompting the US Federal Reserve to ration distribution and work with the US Mint to boost supply.
With the partial closure of the economy due to the coronavirus crisis, "the flow of coins through the economy has kind of stopped," Federal Reserve Chair Jerome Powell told the House Financial Services Committee.
Making matters worse, the US Mint has decreased production of coin due to measures put in place to protect its employees.
"We are working with the Mint and the Reserve Banks and as the economy reopens we are seeing coins beginning to move around again," Powell said. He made the remarks in response to a question from Tennessee Congressman John Rose, who said a bank in his district told him it would run out of coins by the end of the week because the Fed was only sending a portion of its usual order of coins.
"We all don't want to wake up to headlines in the near future such as 'Banks run out of money,'" he said. Banks "don't know what to tell their customers."
Powell said he was well aware of the issue and believed it would be temporary. "We feel like we are making progress," Powell said.
The Fed on Monday told banks it is working with the Mint to increase supply, but that until the shortage can be cured would limit the number of pennies, nickels, dimes and quarters it sends to them "to ensure a fair and equitable distribution of coin inventory." Allocations will be based on banks' historical patterns of coin orders, it said.