US Ends Penny Production — In a historic decision marking the end of an era, the United States Mint has officially ceased the production of one-cent coins, bringing to a close more than 230 years of penny-making tradition. The final batch of pennies was struck on Thursday at the Philadelphia Mint, symbolizing both nostalgia and economic pragmatism for a country seeking to cut unnecessary costs.
A Farewell to America’s Smallest Coin
Pennies have long been a fixture in American life — jingling in pockets, collecting in jars, and representing a symbol of thrift and everyday commerce. Introduced in 1793, the penny honored Abraham Lincoln since 1909 and became one of the most recognizable coins in circulation.
However, modern economic realities have caught up with sentimentality. Each penny now costs nearly four cents to manufacture, according to the US Treasury Department, making it financially unsustainable to continue production. That’s more than double the cost of just a decade ago.
President Donald Trump, who first announced the plan to phase out the penny earlier this year, described the decision as a move to “rip the waste out of our great nation’s budget — even if it’s a penny at a time.”
The Economics Behind the Decision
The Treasury estimates that ending penny production will save taxpayers approximately $56 million annually. This figure comes not just from the cost of metal and minting, but also from distribution and handling expenses.
In today’s economy, where digital payments dominate, small denomination coins have become increasingly irrelevant. Cash transactions now account for less than 18% of all retail payments in the US, according to the Federal Reserve.
A 2022 government analysis found that about 60% of all coins in circulation — worth between $60 and $90 for the average household — are sitting unused at home in piggy banks or drawers. This hoarding effect means billions of coins are effectively removed from the economy, further diminishing the penny’s purpose.
How Businesses Are Adapting
As the penny disappears, businesses are already adapting. Many retail stores, cafes, and gas stations across the US have begun rounding prices to the nearest five cents.
While this may seem minor, economists warn that the change could gradually increase prices. A study from the Richmond Federal Reserve suggests rounding adjustments could cost US consumers about $6 million per year collectively.
Still, most business leaders view the change as inevitable. “The era of cash change is ending,” said John Carver, a retail analyst with the National Business Economics Council. “Businesses will streamline transactions digitally, and rounding will become the norm.”
A Look Back at the Penny’s Legacy
The US penny has evolved multiple times over two centuries. Originally made of pure copper, it transitioned to copper-plated zinc in 1982 due to metal shortages and inflation. Despite these adaptations, the coin remained an enduring symbol of American heritage and everyday life.
From Lincoln’s iconic profile to the phrase “In God We Trust,” the penny held deep cultural value. But nostalgia could not outweigh the economics. For many, its end marks a bittersweet farewell to one of the oldest ongoing traditions in US minting history.
Lessons from Other Nations
The US is not the first to retire its smallest denomination coin.
- Canada stopped minting its one-cent coin in 2012, citing similar cost concerns.
- Australia and New Zealand removed their one and two-cent coins in the 1990s, later phasing out five-cent coins as well.
- The UK halted production of new one-penny and two-penny coins in 2024, after determining there were enough already in circulation.
In every case, public adaptation was swift. Consumers quickly accepted digital and rounded pricing models, proving that economies can function efficiently without the smallest coins.
What Happens to Existing Pennies?
According to the Treasury Department, an estimated 300 billion pennies remain in circulation — far exceeding what’s needed for commerce. These coins will continue to be legal tender indefinitely, though their presence will naturally decline as they are lost, damaged, or withdrawn from circulation.
Collectors and hobbyists are expected to drive renewed interest in vintage and rare pennies, especially those from earlier mint years. Coin experts predict that early Lincoln pennies and special mint editions may gain significant value in numismatic markets.
What About the Nickel?
With the penny now retired, attention has turned to the five-cent coin, or nickel. The nickel currently costs nearly 14 cents to produce, sparking discussions about whether it too should be phased out.
However, unlike the penny, removing the nickel could have broader implications. The Richmond Federal Reserve estimates that doing so could cost consumers $55 million annually through price rounding and transaction adjustments.
Economists expect the nickel debate to intensify in coming years as inflation, digitalization, and cost-efficiency continue to shape modern currency policy.
The Digital Dollar Era
The end of the penny also symbolizes a broader transition — the gradual move toward a cashless society. As mobile payments, online transactions, and digital currencies rise, the need for physical change diminishes.
The US Treasury is reportedly studying Central Bank Digital Currency (CBDC) options that could eventually modernize the entire American monetary system. In that sense, the penny’s end is not just a cost-cutting measure but a step into the digital financial future.
A Symbolic End of an Era
For over two centuries, the penny represented thrift, humility, and national identity. From children saving their first cents to charities collecting coins for good causes, it held emotional and symbolic value.
Yet as the economy evolves, practicality wins over tradition. The US ending penny production marks not just a change in currency but a cultural shift — one that mirrors the digital age’s relentless pursuit of efficiency.
In President Trump’s words, “It’s time to make every cent count — by not making it at all.”
This report is based on information originally published by BBC News, with additional analysis and context provided by FFR Business.
