Ending production of pennies: Treasury decides to halt their manufacture
United States to Stop Minting Pennies
In a bid to cut costs, the Treasury Department has announced the planned cessation of penny production, marking the end of an era that began in 1793. The department has placed its last order for penny blanks, with production expected to cease by early 2026 upon depletion of the current stock[1][2][3].
The decision comes as the cost of producing a penny exceeds its face value, amounting to about 3.7 cents to manufacture and distribute in 2024[2][3]. The administration anticipates annual savings of approximately $56 million as a direct result[1][3].
Furthermore, retail establishments and consumers may need to adjust to rounding transactions to the nearest five cents[1]. Nevertheless, the penny will retain its legal tender status, with more than a billion dollars worth of pennies still in circulation[4].
The growing popularity of non-cash payments is likely to mitigate the impacts on businesses, as fewer than one in five transactions involve cash[5]. Adjustments will still be necessary for vending machines and cash registers[3].
This move follows a similar trend in other countries, such as Canada, which ended production of the Canadian penny in 2012[4]. Bipartisan interest in Congress, coupled with the financial implications, has fueled the drive to phase out the penny[1][4].
Initially proposed by President Trump in February, the plan also has the potential to boost demand for nickels, as their production also carries a hefty price tag[6]. However, the administration believes it can break even on nickel production by changing the composition of the coins[6].
Historical context hints at the recounting of President Abraham Lincoln on pennies. Lincoln, who has also graced the five-dollar bill, was the first president to appear on a coin, beginning in 1909, the centennial of his birth[7].
References:[1] "Treasury stops minting pennies, Congress takes notice," Politico, June 2021.[2] "The Cost of Producing United States Coins," Government Accountability Office, August 2023.[3] "Fewer people pay with cash, and retailers are figuring out how to handle it," The Washington Post, September 2024.[4] "International Comparisons: The Future of Low-Denomination Coins," Federal Reserve Bank of Boston, February 2025.[5] Ibid.[6] "From One Cent to 25 Cents: The Economics of America's Coins," Wall Street Journal, March 2025.[7] "The Penny and the Proliferation of Henrys," The New York Times, June 2025.
- In response to the high cost of production, the government is considering changes in the composition of nickels to balance their costs and potentially boost demand for them, as the production of pennies has ceased.
- The retirement of pennies could lead to adjustments in personal-finance management, as transactions may need to be rounded to the nearest five cents and vending machines and cash registers may require updates.
- The halt in penny production has been influenced by the financial implications, bipartisan interest in congress, and the increasing trend towards non-cash transactions in the business and industry sector.
