In a significant shift in U.S. currency policy, the Treasury Department has announced plans to discontinue the production of the penny by early 2026. This decision follows a directive from President Donald Trump, citing the coin’s production cost—approximately 3.69 cents per penny in 2024—as a primary factor.
The cost of minting the penny has exceeded its face value for 19 consecutive years, leading to substantial financial losses.In 2024 alone, the U.S. Mint reported an $85 million loss from producing over 3 billion pennies. The rising prices of raw materials, particularly copper and zinc, have contributed to these escalating costs.
The nickel, another low-denomination coin, also incurs production costs above its face value. In 2024, it cost nearly 14 cents to produce a single nickel. This trend has persisted for nearly two decades, prompting discussions about the efficiency of maintaining such coins in circulation.
Despite the cessation of penny production, existing pennies will remain legal tender. To facilitate the transition, the Treasury Department advises that cash transactions may be rounded to the nearest five cents, a practice already adopted by countries like Canada and Australia.
The decision to eliminate the penny has garnered bipartisan support, with figures like former President Barack Obama endorsing the move. However, some industry groups, particularly those representing zinc producers, have expressed concerns about the potential economic impact.
As digital transactions become increasingly prevalent, the practical use of low-denomination coins has diminished. The Treasury’s decision reflects a broader effort to modernize the nation’s currency system and reduce unnecessary expenditures.
The U.S. Mint will continue to monitor the costs associated with coin production and explore alternative materials and methods to ensure fiscal responsibility. Further evaluations may lead to additional changes in the nation’s coinage in the coming years.
