[ELI5] How do coins enter circulation?

109 views

We generally can’t withdraw money from ATMs or banks in the form of coins. How do retail businesses and other institutions get coins to give as change to their customers?
Do people specifically withdraw money as coins?

In: 1

As a business, you can call a bank and request a withdrawal of say £100 from your business account. And then you can further specify in what denominations or in coins, IE so many in 2/1/.50/.20/.10/.05/.02/.01 etc which you would use for change in your store.

When you turn up they count out the coins etc into coin rolls and then give them to you in a sack for you to take away

Yes.

Business need coins to provide change, so when they withdraw cash they get a certain amount in coins

Banks also issue coins when people cash checks.

Banks, especially your bank that you have an account with, will give you rolled coins for cash.

Banks hand them out. You can just call and say “I need coins. Lets say 100 of each kind.” The bank will just tell you their worth, order them into their branch office for you to pick up, and withdraw it from your bank account at handover.

Businesses withdraw money from their bank, and they specifically ask for coins so they get coins. And you can withdraw in coins too, just go to the teller and say you want to withdraw $100 in quarters, they’ll hand you $100 in quarters. you can even go and ask for it in $2 bills if you want (might take them a day or two to order it though).

As for entering circulation, the US Mint makes the coins and sends them to the Federal reserve, banks have accounts at the federal reserve, and banks can ask to withdraw money from their account, and can ask for it in cash or coins or whatever they want. Further banks can deposit cash or coins at the federal reserve, and the federal reserve can pick out the old money after it’s deposited, and destroy it (to be replaced by new money sent in by the US Mint or Bureau of Engraving and Printing)