Penny shortage pushes Fed to restart coin deposits
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Sarah Grillo/Axios
The worsening U.S. penny shortage has prompted the Federal Reserve to resume accepting penny deposits on Jan. 14 at more coin distribution locations.
Why it matters: The move could ease checkout friction for cash-paying shoppers, where a lack of coins has led to rounding, confusion and longer lines.
Driving the news: The Fed said Thursday it will again accept pennies from banks and credit unions at some commercial coin distribution locations where deposits had been suspended because of local inventory constraints.
Yes, but: The move is limited and does not restart penny production. It falls short of a fix, retailers say.
- "It is welcome news to see the Fed is going to reopen certain distribution locations that may have pennies, but this should not be viewed as a solution to the broader circulation problem," Austen Jensen, senior executive vice president of public affairs at the Retail Industry Leaders Association, told Axios.
- Jensen said there is no guarantee pennies from reopened sites will be quickly circulated to retailers or remain available for long without federal legislation.
Flashback: President Trump ordered the Treasury to stop making new pennies last February, calling the coin's demise a way to "rip the waste" out of the budget.
- The last pennies were minted in Philadelphia in November.
How it works: The U.S. Mint produces coins, while the Fed helps with distribution. It provides existing coins to banks and credit unions, who in turn supply coins directly to businesses.
What we're watching: The Fed said it will monitor penny flows to determine whether there could be more ways to expand ordering options to help get the limited supply of existing pennies to more places.
More from Axios:
