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US halts penny production after 230 years
The Philadelphia Mint will strike its final batch of one-cent coins on Wednesday, marking the end of over two centuries of production since the penny's debut in 1793. While the coins will remain legal tender, businesses are already adjusting prices amid reports of dwindling availability, officials confirmed.
Cost-cutting drive behind decision
The move follows a February announcement by then-President Donald Trump, who framed it as part of broader efforts to "rip the waste out of our great nation's budget, even if it's a penny at a time." Data from the Treasury Department shows each penny-composed of copper-plated zinc and featuring Abraham Lincoln-now costs 3.8 cents to produce, double the expense from a decade ago. Eliminating production is projected to save taxpayers $56 million annually.
Officials cite the decline of cash transactions as a key factor. "The rise of electronic payments has rendered the penny increasingly obsolete," a Treasury spokesperson noted. With an estimated 300 billion pennies still in circulation-"far exceeding commercial needs"-the government argues the supply remains adequate for the foreseeable future.
Where do all the pennies go?
A 2022 federal analysis revealed that roughly 60% of all U.S. coins-valued at $60-$90 per typical household-sit unused in jars, piggy banks, or drawers. "Most people don't bother trading them in," the report concluded, highlighting the coin's diminishing role in daily commerce.
Consumer impact: Rounding up, not down
While the government touts savings, economists warn shoppers may bear the brunt. A Richmond Federal Reserve study estimates that price rounding-likely upward-could cost consumers an additional $6 million per year. "Businesses will round to the nearest nickel, and history shows that benefits retailers more than buyers," the report stated.
Global precedent: Other nations ditch low-value coins
The U.S. joins a growing list of countries phasing out small denominations. Canada ceased one-cent coin production in 2012, while Australia and New Zealand retired their one- and two-cent pieces in the 1990s (New Zealand also axed the five-cent coin in 2006). The UK considered scrapping its 1p coin in 2018 but abandoned the plan, though it paused production in 2024 after deeming existing supplies sufficient.
Next target: The nickel
Attention has now shifted to the five-cent nickel, which costs 14 cents to manufacture-nearly triple its face value. Retiring it could hit consumers harder, with the Richmond Fed projecting an annual cost of $55 million from rounded-up transactions. "The nickel's fate may hinge on whether digital payments continue to dominate," an analyst noted.
"Supplies have stabilized, but the penny's era as a practical currency is over. The question now is whether we'll see a cascade effect with other low-value coins."
Treasury Department statement, November 2025
