A paper by PCMI assesses opportunities for stablecoins in cross-border payments1. Stablecoins are blockchain-based digital assets pegged to a fiat currency and around $210 billion worth are in circulation, the largest issuers being Tether (USDT) and Circle (USDC).

The International Mint Industry Association (IMIA) was founded last year and officially launched this month at the World Money Fair in Berlin, with a specific focus on research and advocacy for coins as part of the cash, and hence payments, ecosystem. IMIA President Gerhard Starsich (GS) and Managing Director Martina Horakova (MH) spoke to sister publication Coin & Mint News™ about the foundation of the new association, the role of coins in the cash cycle, and how the IMIA plans to make the case for their importance, and indeed that of cash overall.

Four speakers focused on the future of cash at the recent Mint Directors Conference online forum. Two academics used their research to explain how, and why people pay as they do and then two speakers questioned future payments and how they might evolve.

The Federal Reserve Bank of Kansas City has gone public encouraging people to use coins and to return them into the cash cycle. After the coin hiatus last year, which saw the formation of the Coin Taskforce and limits on the issue of coins to retailers and institutions, the situation had eased with the limits lifted and normal service resuming.

Without coins you cannot receive change when you pay with a banknote. Although banknotes receive most attention in the cash cycle, April’s MDC webinar reminded people why that is a mistake.

One of the parts of the cash cycle most affected by the pandemic has been coins. The normal flow has been seriously disrupted as people have switched to card payments or have rounded cash payments to use notes in preference to coins. In February 2020 there were almost £3 million worth of 2p coins held in wholesale cash centres, but demand has continued to outstrip supply almost every week, and in the past twelve months over £2.2 million in new 2p coins have been issued into circulation but never returned. Where are they all and why aren’t the pennies behaving the same?

At the ICCOS Americas online conference there was, unusually, a coin panel, ‘Coin, coin everywhere and not a cent to spend.’ The focus was on what had happened to coins in the US in the pandemic, why a Coin Task Force had had to be set up and what the situation is now. The panel consisted of Kathleen Young from the Federal Reserve Cash Services Product Office, Ashley Yayock from Walmart, Thomas Strauser from Loomis, JR Davis from Davis Bankcorp and Linda Sherry from National Priorities Consumer Council.

The Bundesbank (BBk) provides 25.5% of the fully paid capital that underpins the European Central Bank (ECB), but it has brought into circulation 29.9% of the value of coins in circulation (€8.46 billion). This figure has been stable for some time.