One of the less obvious effects was a shortage of circulating coins in the United States. Billions of coins existed, but they were either in businesses which were temporarily closed or permanently closed, or they were in people’s homes, and with millions of people under “lockdown,” those coins weren’t circulating.
The types of transactions which often involve coins were particularly hard-hit: people used more credit cards than cash, made more online purchases, and casual foot traffic in city centers was sparse to non-existent. Buying a newspaper, a cup of coffee, or a candy bar while walking downtown — once an ordinary part of daily life — quickly became rare.
To keep the economy alive, the U.S. Mint ramped up production to replace the coins which were frozen in idle cash registers or in homes. Writing for American Banker magazine, Jon Prior reports:
To help push more coins into circulation, the U.S. Mint last year boosted production to levels not seen since 2017.The Mint’s two facilities in Denver and Philadelphia churned out 14.8 billion coins for circulation in 2020, up 26% from less than 12 billion the year before, according to data the agency provided to American Banker.
The effort was part of a plan between the government, coin collection companies, retailers and banks to cure a shortage in tills across the U.S. as in-person spending slowed in the early months of the pandemic and online and card transactions soared. The sudden scarcity of change was one of the unseen economic side-effects of the coronavirus pandemic, but that boost in production, combined with increased economic activity in recent months, means that coin circulation is finally returning to normal, industry officials say.
The extra production by the Mint happened at a time when maintaining normal production levels was already a challenge. The increased mintages represent a heroic effort.
In raw numbers, for example, the total number of nickels produced in 2018 was 1256.4 million; in 2019 it was 1094.89 million, but the pandemic in 2020 pushed the mintage to 1623.1 million. The increase in output was shared by both the Denver mint and the Philadelphia mint. Those are the only two mints in the United States which produce circulating coins. Smaller mints in San Francisco and in West Point produce coins only for investing and collecting, but not for retail circulation.
Similar increases were achieved in the production of the dime and quarter.
On the other hand, coins deemed less essential to commerce — the penny, the half-dollar, and the dollar coin — saw production levels in 2020 similar to, or slightly lower than, the previous two years, as resources were directed to the more urgently-needed coins.
