The U.S. Treasury Department has announced the cessation of penny minting and production, marking the end of over two centuries of minting the one-cent coin. This decision stems from escalating production costs and the coin’s declining relevance in modern commerce.
President Donald Trump directed the Treasury to halt penny production, emphasizing fiscal responsibility. “For far too long the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful!” he stated on Truth Social.
The U.S. Mint reported that each penny costs approximately 3.69 cents to produce, leading to an annual loss of $85.3 million in the 2024 fiscal year. With about 114 billion pennies currently in circulation, the Treasury anticipates immediate annual savings of $56 million from halting production, along with additional savings from reduced facility usage.
The discontinuation of the penny will necessitate changes in cash transactions, with prices expected to be rounded to the nearest five cents. While digital transactions will remain unaffected, this shift mirrors Canada’s 2013 decision to eliminate its penny and implement similar rounding practices.
However, concerns have arisen regarding the increased reliance on nickels, which cost nearly 14 cents each to produce. Critics argue that the heightened demand for nickels could offset the savings from discontinuing the penny.
Despite these concerns, the penny’s role in daily transactions has significantly diminished, with many Americans discarding or hoarding the coin. The decision to cease penny production reflects a broader shift towards economic efficiency and modernization of the U.S. currency system.
While existing pennies will remain legal tender, their production will cease once the current inventory of blanks is depleted. This move signifies a notable change in U.S. monetary policy, aligning with global trends and acknowledging the evolving landscape of financial transactions.
