- The U.S. government ordered its last batch of penny blanks and will stop producing the coins when those run out.
- Proponents want to stop producing the penny due to how expensive it is to produce.
- The alternative is to use more nickels, which are even more expensive to produce.
Following an executive order from President Donald Trump in February to stop putting pennies in circulation, the U.S. Mint has made its final order of penny blanks with a plan to stop producing the coin when those run out.
According to The Wall Street Journal, a Treasury Department spokesperson said this month the government made its final order of penny blanks. The U.S. Mint will continue to produce the coins only as long as the inventory of penny blanks exists.
U.S. officials have wanted to get rid of the penny for years, citing the fact that the cost of producing the coin is higher than the value of a penny. In February, Trump ordered Treasury Secretary Scott Bessent and the U.S. Mint to stop making pennies.
“For far too long the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful! I have instructed my Secretary of the US Treasury to stop producing new pennies. Let’s rip the waste out of our great nations budget, even if it’s a penny at a time,” Trump said in a post on Truth Social.
How much money will be saved by killing off the penny?
During the 2024 fiscal year, each penny cost 3.7 cents to produce, according to Axios. The statement from the Treasury estimated that there would be an immediate savings of $56 million for taxpayers.
“Given the cost savings to the taxpayer, this is just another example of our administration cutting waste for the American taxpayer and making the government more efficient for the American people,” the statement said, per CNN.
Last year, the U.S. government lost over $85 million on producing around 3 billion pennies, per The Wall Street Journal.
But without the penny, the nickel will be relied on more and that alternative is even more expensive. According to CNN, each nickel costs 13.8 cents, 11 cents of production costs and 2.8 cents of administrative and distribution costs.
The Treasury’s statement did not address plans for nickel production.
Any savings made from eliminating the penny would be wiped out if the Mint has to make at least 850,000 extra nickels to compensate. If penny production is stopped permanently, the Mint will likely have to make 2 million to 2.5 million extra nickels a year.
According to The Wall Street Journal, Americans throw away around $68 million in coins a year.
Will you still be able to use pennies to pay for things?
Consumers will still be able to use pennies to pay for things after production stops, according to The Associated Press.
As pennies start to move out of circulation, businesses will have to start rounding up or down to the nearest nickel.
According to The Wall Street Journal, non-cash transactions will continue to be charged at exact change. The Treasury said that guidance should be provided to retailers by state and local governments so that sales taxes are collected properly.
Is this really the end of the penny?
Congress has the power to dictate currency specifications such as size and metal content of coins. It could make Trump’s order to end the penny permanent through law.
According to the AP, past congressional efforts to get rid of the penny have failed.
There were two bipartisan bills to permanently stop penny production this year, per the AP. Sens. Mike Lee, R-Utah, and Jeff Merkley, D-Ore., introduced the Make Sense Not Cents Act in May. Last month, Reps. Lisa McClain, R-Mich., and Robert Garcia, D-Calif., along with Sens. Cynthia Lummis, R-Wyo., and Kirsten Gillibrand, D-N.Y., introduced the Common Cents Act.
Other countries have already stopped producing 1-cent coins. Canada stopped producing the penny in 2012, and Australia and New Zealand stopped producing its 1-cent pieces decades ago.