From proverbs to childhood memories, the penny has become ubiquitous throughout American culture, but the coin may soon become a relic of the past. As first reported by The Wall Street Journal and confirmed by Straight Arrow News on Thursday, May 22, the U.S. Treasury Department will stop putting new one-cent coins into circulation by early 2026.
After the new pennies stop being produced, the Treasury notes, businesses will eventually need to start rounding cash transactions up or down to the nearest five cents, which may make prices like “$9.99” a thing of the past as well.
Cost of living
Over the past 10 years, the total production cost of the penny has risen from 1.3 cents to 3.69 cents per penny, according to the U.S. Treasury Department.
A penny made is nearly a nickel lost
The department’s rationale is that it costs more to produce a penny than it’s actually worth, with one penny costing nearly four cents to make.
A Treasury spokesperson told Straight Arrow News, the cost of making a penny increased by 20% in the 2024 fiscal year. The spokesperson added, there are an estimated “114 billion pennies in circulation in the U.S., but are severely underutilized.”
The spokesperson said in an email to Straight Arrow News, “Given the cost savings to the taxpayer, this is just another example of our administration cutting waste for the American people and making the government more efficient for the American people.”
The move also has bipartisan support, with both President Donald Trump and President Barack Obama previously expressing support for eliminating the penny. Trump asked the Treasury earlier this year to stop further production of pennies, and since his request, legislation to end production of one-cent coins has popped up in the U.S. Senate and House.
Sen. Mike Lee, R-Utah, in partnership with Jeff Merkley, D-Ore., introduced a bipartisan bill this month, named the Make Sense Not Cents Act, that aims to eliminate the penny. The bill follows an effort by Democrats and Republicans in the House, who introduced the Common Cents Act, which also seeks to end the production of pennies.
The Journal reports, the U.S. government lost more than $85 million in 2024 on the estimated 3 billion pennies it made. The Treasury told SAN that the move will offer $56 million in yearly savings. The department will reportedly halt production once it uses up all the blank templates used to make pennies. The last order of the templates was put out this month, according to the Journal.
Should you keep your pennies?
Americans can still use pennies in cash purchases following the initial halt in production, but as the coins eventually become scarce, businesses will need to adjust prices. However, the Journal notes, non-cash bills and transactions will still need “to be priced at exact change.” State and local governments are advised by the Treasury to provide guidance to retailers, ensuring that sales taxes are collected in accordance with the law.
The Treasury’s authority
Congress mandates currency production, which includes the size and material of the coins, and can discontinue or remove coins. However, the Treasury asserts that it has the authority to stop the production of new coins.
According to the Federal Reserve, around 60% of actively circulating coins or up to the amount of $14 billion, sit in coin jars, and Americans reportedly throw away up to $68 million in change annually.
Following other countries’ leads
The Treasury’s reported move follows the likes of Canada, which halted production of its one-cent coin in 2012 and began rounding cash transactions up to the nearest five cents. Down under, in Australia and New Zealand, one-cent coins have been out of those nations’ circulations for decades.
Fun facts
The U.S. first introduced the penny in 1792. The one-cent coin has since gotten smaller in size and changed in the material used to manufacture it, from pure copper to a combination of zinc and copper. The first began featuring President Abraham Lincoln on its beginning in 1909 to commemorate his 100th birthday.
