Making sure the economy always has the currency it needs is a critical mission of the Federal Reserve. Though more and more payments occur electronically, cash will always be an essential element in payments and indispensably important to the financial system. During times of crisis, cash may be the only means for companies and individuals to transact business.
Never was this clearer than last year in Puerto Rico. When Hurricane Maria tore through the island in September 2017, it knocked out electricity, crippled communications, and disabled the U.S. territory’s airports. Automated systems of payment were disrupted, and debit and credit cards couldn't be used.
"Within a matter of hours, Puerto Rico became a 100 percent cash economy," said Amy Goodman, vice president and chief of the Atlanta Fed’s Cash Function Office, based in New Orleans.
The Atlanta Fed's Cash function stepped in to help meet the need. The Miami Branch shipped more than $670 million in currency to the island in the two weeks after Hurricane Maria made landfall. (See the Economy Matters story "Atlanta Fed Cash Staff Steps Up to Support Puerto Rico.")
Ahead of a major storm, there is typically a high demand for cash as people rush to buy food and emergency supplies. The Fed supplies extra currency to banks and keeps replenishing those supplies during those times, Goodman said.
And when a big storm disrupts the payments system's infrastructure, as happened in Puerto Rico, the Cash office also makes sure the economy has the currency it needs until the normal infrastructure is restored. When a potentially devastating storm is expected, the Fed’s Cash employees are provided shelter in or near their Bank so they can report to work as soon as first responders are allowed into a storm-affected area.
"Part of our mission under the Federal Reserve Act is to make sure that cash is always readily available in normal times and in times of stress," Goodman said. "We would never want to be in a position of having one of our banks or our financial community in need of money and we're not positioned to give it to them."
For more information about the Atlanta Fed's cash function, go to Currency and Coin Services.