Banks struggle with coin-filled vaults in cashless Korea

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As Korea becomes increasingly cashless, banks are grappling with a problem — too many coins piling up in their vaults.

The loose change, now rarely used, has become a growing logistical burden as lenders must store and eventually return it to the Bank of Korea (BOK).

Industry officials say that handling coins is more burdensome than banknotes because they are heavier and more challenging to process.

To cope with the growing volume of coin deposits, many bank branches accept coins only during designated hours. Customers feed the change into coin-counting machines, which sort and package the coins before exchanging them for banknotes or depositing the equivalent amount into their accounts.

The packaged coins are then stored in branch vaults until they are transported to the BOK.

"Banknotes move in and out, but coins are the real problem. Once they come in, they rarely leave. They take much longer to sort and count and are much heavier," said an official at a commercial bank branch in Gyeonggi Province.

Branches in Seoul send collected cash to the BOK headquarters, while branches elsewhere ship them to their respective regional BOK offices.

The cash is transported by cash-in-transit companies under strict security requirements. The companies are required to use specially equipped armored vehicles fitted with cash storage systems and GPS tracking devices, while personnel must comply with identification and security procedures to enter the central bank.

Transport fees typically start at around 50,000 won ($35) per shipment for coins and 70,000 won for banknotes, with additional charges based on weight.

"The fees are not the biggest issue. The bigger problem is that we can't send them whenever we want," the bank official said. "There are designated days when the BOK accepts coin deliveries, and if it cannot receive them, we have no choice but to keep them until the next transfer date."

Bank of Korea headquarters in Seoul / Courtesy of Bank of Korea

The burden extends beyond commercial banks, as the buildup of coins has also created challenges for the central bank.

BOK data shows that the value of coins held by households, businesses and financial institutions has steadily declined over the past several years, falling from 2.36 trillion won in 2020 to 2.22 trillion won in 2025.

With fewer coins circulating through the economy, they eventually accumulate at the BOK's vaults.

"We are well aware of the difficulties commercial banks are facing. But there are times when we simply cannot accept additional coin deliveries because of physical limitations," said an official at the BOK's currency management department.

Instead of minting new coins, the central bank has increasingly relied on recirculating those already in circulation. Last year, the value of coins collected exceeded new issuance by 35.5 billion won, marking the sixth consecutive year that collections outpaced issuance.

Not every coin makes it back into circulation, and coins marked for disposal are melted down and recycled into industrial materials. To reduce these costs, since May, the BOK began disposing of coins using a waffling process, which compresses coins into dense metal blocks before they are recycled.

Despite the continued decline in coin circulation, however, the BOK said it has no plans to stop issuing coins.

"We are adjusting coin production based on the number of coins already in circulation, existing inventories and public demand," the official said.