The U.S. Treasury Department has announced plans to discontinue the production of the penny by early 2026, marking the end of over two centuries of the one-cent coin’s circulation.
💰 Why Is the Penny Being Phased Out?
The primary reason for discontinuing the penny is its production cost. Each penny costs approximately 3.69 cents to manufacture, leading to significant annual losses. In 2024 alone, the U.S. Mint spent around $85 million to produce pennies.
President Donald Trump initiated this move in early 2025, labeling the penny as “wasteful” and instructing the Treasury to halt its production.
🛒 Impact on Daily Transactions
With the penny’s phase-out, cash transactions will be rounded to the nearest five cents. For instance:
- $10.02 would round down to $10.00
- $10.03 would round up to $10.05
This rounding applies only to cash payments; electronic transactions will remain unaffected.
🏛️ Legislative and Historical Context
The penny has been a staple of U.S. currency since 1792, featuring President Abraham Lincoln since 1909. While the executive branch has taken steps to end its production, Congress has also introduced bipartisan bills, such as the “Common Cents Act,” to support this initiative.
🌍 Global Precedents
The U.S. is not alone in retiring its lowest-denomination coin. Countries like Canada (2013), Australia (1992), and New Zealand have successfully eliminated their one-cent coins, adjusting pricing systems accordingly without major economic disruptions.
🪙 Collector’s Perspective
Coin collectors are showing increased interest in 2025 pennies, anticipating their potential rise in value due to their final-year status. Rare or misprinted coins from this batch could become valuable collector’s items.
🔮 Looking Ahead
The discontinuation of the penny reflects a broader shift towards digital transactions and cost-effective currency management. As the U.S. adapts to this change, consumers and businesses alike will adjust to a penny-free economy.