Will Coins Be Missed?
With a pandemic shortage and digital wallets on the rise, some see the demise of coins.
Nov 30, 2020 | 2 min read
NEW YORK—Coins used to be everywhere until this past summer when a national shortage of pennies, nickels, dimes and quarters emerged. With the pandemic fueling an acceleration of the use of mobile apps, credit cards and other cashless payment methods, could coins face obsoletion?
China is moving toward a digital currency, while the U.S. Federal Reserve said it’s researching and experimenting with a similar move. Bitcoin has gained prominence, while Facebook has been working on its own currency, the New York Times reports.
“There’s a battle for the future of money going on,” said Alex Tapscott, a co-founder of the Blockchain Research Institute, who pointed out that banks, credit card firms, governments and online communities all want to change how people pay for goods and services. “As for cash,” he said, “an elegy is in order.”
Small businesses continue to rely on cash more than larger companies and retailers. Paying digitally is easy for many people, but for the growing population in poverty, “going cashless is quite expensive” because of hidden fees associated with credit or debit cards, said Jay Zagorsky, a professor at the Questrom School of Business at Boston University.
However, coins have staunch defenders, including those who point to how coins give us historical perspective. “The designs don’t just happen out of happenstance,” said Rod Gillis, education director for the American Numismatic Association. “You can learn so much about our culture from just learning about what appears on our coins.”
The U.S. Federal Reserve warned about a coin shortage in June when Fed Chairman Jerome Powell said that coronavirus-related shutdowns have raised concerns about the circulation of coins, which the Fed’s 12 regional banks supply to commercial banks. On June 11, the Federal Reserve issued a rationing order, cutting down on the number of coins provided to the banks. The shortage was in part due to the U.S. mints closing temporarily because of coronavirus restrictions but also because fewer coins were in circulation as people cut back on in-person shopping trips.
NACS has spearheaded efforts to push the Federal Reserve and U.S. Treasury Department to address the situation. Read more about NACS advocacy and how convenience stores are handling the coin shortage in “Change Management,” from the September 2020 issue of NACS Magazine.
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