One-cent coins, commonly known as pennies, will stop being produced in the United States next year, marking a historic shift in American coinage. According to the Treasury Department, the decision aims to curb production costs and simplify transactions for businesses and consumers alike.
The penny, one of the first coins minted by the US Mint back in 1793, has remained a small but iconic piece of national currency for more than two centuries. However, rising costs and debates over its practicality led President Donald Trump to instruct Treasury Secretary Scott Bessent in February to halt penny production. Critics of the zinc and copper coin describe it as wasteful, while supporters argue it keeps prices stable and boosts charitable fundraising.
Why the United States is ending penny production to reduce rising minting costs
Over the past decade, the cost of producing a single penny jumped from 1.3 cents to approximately 3.69 cents. Some economists and officials believe this cost is no longer justifiable, pointing to potential annual savings of over $56 million. Have you ever wondered how much of the federal budget goes into manufacturing small denominations?
The new measure is expected to free up funds for other Treasury initiatives, while also streamlining currency circulation by eliminating a coin that many people leave collecting dust in jars.
How phasing out pennies might influence pricing, charitable donations, and everyday shopping
Phasing out the penny means retailers will need to round prices up or down, a shift the Wall Street Journal (WSJ) says could have a ripple effect on consumer spending. In fact, some businesses already encourage cashless or coin-free transactions to speed up payment. Nevertheless, charities that rely on penny drives may see a short-term challenge, though many are exploring new digital donation methods.
Are you curious about whether ditching the penny will actually boost efficiency in day-to-day purchases? Experts suggest it might reduce checkout times and produce minor cost benefits for small businesses that handle large volumes of coins. Below is a brief comparison of penny usage and production data:
| Year | Cost to Mint One Penny | Total Annual Cost (Approx.) |
|---|---|---|
| 2013 | 1.3 cents | $32 million |
| 2023 | 3.69 cents | $56 million |
As illustrated, costs have significantly increased over the last decade, leading to growing pressure on the government to drop the coin altogether.
A Treasury spokesperson confirmed that the Mint has placed its final order of penny blanks. While the inventory lasts, pennies will still be manufactured, but no new orders will be made once supplies run out. Other countries, such as Canada, eliminated their one-cent coins years ago, citing similar concerns over minting expenses and reduced purchasing power.
This bold move by the United States highlights how shifting consumer trends and rising production costs can ultimately determine the fate of a longstanding currency. For those who cherish the penny’s historical significance, now might be the time to preserve a few coins as collectibles or souvenirs before they vanish from circulation.