Retail financial professionals know better than most that the urban legend of untold billions in coins hiding between the couch cushions is, in fact, a reality. What they may be less aware of is the actual scope and scale of the metal currency economy. Understanding that requires getting up off the sofa and taking a look around.
With global societies continuing to abandon cash for electronic payments at a steady pace, cash and cash transactions have become even more of a world apart – and within that world, metal currencies represent yet another high-value ecosystem. And these days it’s getting more attention, as broader economic trends lead more people, companies and financial institutions to make nickel-and-diming a best practice.
The amount of potential new deposits at stake is anything but chump change — $15 billion in the United States alone, $7.3 billion circulating in the economy, and another latent $7.7 billion, just lying around in the swear jars and car cup holders (and, apparently, waste baskets) of American life. Were all that latent coin held in high-yielding accounts, which pay about 5% in 2024, consumers and businesses would be earning some $385 million in extra annual interest.
Understanding the Coin Ecosystem/Economy
The cash economy, including coins, is meaningful: some 5.5 million Americans are paid cash tips, 20% of people prefer transacting in cash, and 55% of small businesses are cash-only, according to research by the Federal Reserve Bank of San Francisco. Doing business with such customers – whether taxi drivers or waiters, or restaurants that offer a discount for paying cash – makes sense for financial institutions today. For most banks and credit unions, increasing deposit balances is 2025’s top priority, according to a survey of small- and mid-sized FIs by financial services marketing firm Vericast.
Beyond the benefits of reaching millions of cash-first people and businesses, tapping the loose change ecosystem can help reduce financial institutions’ operating expenses (eliminating bagging and transportation costs), boost profits (by lowering costs and adding new customers), and enhance productivity and employee morale (teller turnover is reduced by 38% when they don’t have to count coins).
You could even say that getting coins back in circulation is a civic duty. Coin hoarding became a problem during the COVID pandemic when shortages prompted the U.S. Federal Reserve to establish a U.S. Coin Task Force to encourage banks to improve coin circulation. “The coins in piggy banks, jars, and couch cushions will help those who rely on cash transactions for household purchases and to pay bills,” the U.S. Coin Task Force said. It urged consumers to deposit coins at their banks or at coin redemption kiosks, such as those commonly found in grocery stores and retailers.
Where Do Financial Institutions Fit In?
There are good reasons why most banks and credit unions steer clear of coin handling and have been removing courtesy coin-counting machines. FIs hate dealing with coins: they’re heavy, dirty vectors for germs that are time-consuming and costly to handle. For branch tellers, counting coins is their lowest-value, lowest-reward task, not to mention the back-breaking work of filling and transferring dozens of large metal-packed sacks from bank to truck.
Nonetheless, banks and credit unions that commit to bringing coins back into the economy – while limiting the downsides of such work – can connect with millions of Americans they might otherwise never encounter.
Kim Raines is Head of Business Development at Coinstar, a coin-conversion solution provider. (Coinstar’s tagline: “We empower consumers by transforming what they have into what they want.”) Raines believes her firm’s more than 18,000 kiosks nationwide give banks an inexpensive way to reach people beyond their branch networks.
According to Coinstar research, almost 4 million Americans live in “banking deserts,” with another 4 million-plus residing in areas at risk of losing their last bank branch. On the other hand, Raines says, 92% of Americans live within five miles of a coin kiosk, and two-thirds of unbanked people live within 10 miles of a kiosk.
Raines says new technology is making Coinstar’s kiosks more appealing to both customers and banks. People can now have more coin-exchange options, including transferring funds directly to a checking account by swiping their debit card (for a reduced fee). In the case of direct account transfer, the bank typically absorbs a large portion of the kiosk fee, making this the more economical option for the consumer.
The Future of Metal Currency
It’s telling that cash and coin innovation is still happening with digital payments so deeply entrenched in global society and commerce. To be sure, it’s easy to assume that the global future will be free from coins and paper money. And coins, of course, are worth far less than they once were. In 1980, a quarter had the buying power of $1 today.
Indeed, the value of coins is so diminished that for some people, coins are, in fact, trash. A recent Wall Street Journal article featured one salvage company that searches for the $68 million worth of change Americans throw in the trash each year. In seven years, sustainable waste processing firm Reworld has collected at least $10 million worth of coins.
Meanwhile, analysts, academics and policymakers uniformly suggest coins will be part of world commerce for a long time, not least because many countries now use a coin for their equivalent of the one-dollar bill. Most central banks agree, especially when taking into account concerns about the inclusion of unbanked and underbanked populations in the world’s economies: Cash and coin are seen as critical infrastructure, the lack of which would have negative unintended socio-economic consequences.
On balance, as the authors of a 2023 research paper by the Wells Fargo Investment Institute put it: “Will physical cash go away? We doubt it.”
Mark Egan has held leadership roles at Brookfield Asset Management, Allianz Global Investors, Guggenheim Partners and Bloomberg. Egan began his career at Reuters, where he worked as a journalist for nearly 20 years and won two Reuters Journalist of the Year awards. He has a Masters in economics from Trinity College Dublin and lives in Montclair, New Jersey.