When Are Pennies Going to Stop Being Made?
Explore the ongoing debate surrounding the U.S. penny's future. Uncover the complex factors and perspectives shaping its potential discontinuation.
The United States penny frequently sparks public debate regarding its continued existence. Discussions about its future resurface regularly, often fueled by economic considerations and evolving payment habits.
The Penny’s Current Status in the United States
As of late 2025, the U.S. Mint has announced plans to discontinue the production of new pennies. The Treasury Department placed its final order for penny blanks in May 2025, with manufacturing expected to cease once these materials are exhausted, likely in early 2026. Existing one-cent coins will remain legal tender.
The penny has long been a subject of scrutiny due to its manufacturing cost. In 2024, it cost approximately 3.69 cents to produce a single penny, significantly more than its face value. This disparity has resulted in an annual loss for the U.S. government, with estimates suggesting a savings of around $56 million per year by stopping production.
Arguments for Phasing Out the Penny
The primary argument for discontinuing the penny centers on its economic inefficiency. It costs nearly four times its face value to produce, meaning taxpayers subsidize every new penny entering circulation and leading to substantial government losses. This negative seigniorage, where the cost of creation exceeds the coin’s value, makes the penny a fiscal burden.
Beyond production costs, the penny’s low purchasing power contributes to its diminishing utility. Many individuals and businesses find handling pennies time-consuming and cumbersome, leading to lost productivity. Environmental concerns also exist regarding mining the metals for penny production. Pennies are frequently hoarded or fall out of active circulation, demonstrating their limited practical use for many consumers.
Arguments for Keeping the Penny
Proponents of the penny argue that its elimination could lead to unintended financial consequences, particularly for consumers. A primary concern is the potential for “rounding up” prices on cash transactions, which could disproportionately affect low-income individuals who rely more heavily on cash payments. Cash purchases would likely be rounded to the nearest five cents, potentially resulting in a collective “rounding tax” on consumers.
The penny also holds a role in charitable giving, with many organizations relying on small coin donations. Its historical significance, featuring the image of Abraham Lincoln, resonates with some Americans who view its removal as a loss of national heritage. Some argue that while the penny costs more than its face value to produce, other denominations, such as the nickel, also incur production costs exceeding their value, suggesting that discontinuing the penny might not resolve the broader issue of coin production expenses.
What Happens When a Coin is Discontinued
When a low-denomination coin is discontinued, “cash rounding” is typically implemented for cash transactions. This involves rounding the total bill to the nearest multiple of the smallest remaining coin, often the nearest five cents. For example, a transaction ending in one or two cents might be rounded down, while one ending in three or four cents could be rounded up to the nearest nickel.
Several countries have successfully phased out their lowest-value coins, providing precedents for the U.S. Canada stopped minting its penny in 2012, and Australia removed its one- and two-cent coins in 1992. New Zealand discontinued its one- and two-cent coins in 1990, followed by its five-cent coin in 2006. Historically, the United States itself discontinued the half-cent coin in 1857, which at the time had a purchasing power equivalent to approximately 12 to 17 cents in today’s values.