When Will the U.S. Penny Be Discontinued?

The future of the U.S. penny has been a recurring subject of discussion. This small copper-plated coin, a familiar part of American commerce, faces ongoing debate regarding its continued existence. The conversation involves various perspectives on its economic value, cultural significance, and practical utility in modern transactions.

Economic and Practical Arguments for Discontinuation

Arguments for discontinuing the penny primarily center on its economic inefficiency and practical drawbacks. A significant point of contention is the cost of producing the coin, which currently exceeds its face value. As of 2024, it costs the U.S. Mint approximately 3.69 cents to produce and distribute a single one-cent coin. This means the government incurs a loss on every penny minted, leading to substantial financial deficits for the U.S. Treasury, such as the reported $85.3 million loss in 2024.

The penny has been unprofitable to produce since 2006, with its unit cost increasing by over 20% from 2023 to 2024. Beyond production costs, the penny is often cited as a source of transactional inefficiency. Handling pennies during cash transactions can consume additional time for both consumers and businesses, potentially slowing down queues and adding to labor costs. Furthermore, many pennies accumulate in jars or drawers, effectively removing them from active circulation and diminishing their economic utility.

Cultural and Historical Arguments for Retention

Despite economic arguments, the penny holds a place in American culture and history, leading to arguments for its retention. Featuring Abraham Lincoln, the coin has been part of U.S. currency since 1793. This long history fosters tradition and sentimentality among many Americans who view the penny as an enduring symbol.

Concerns exist regarding potential price adjustments if the penny were removed from circulation. Without the one-cent denomination, businesses might round up cash transaction prices to the nearest five cents, cumulatively affecting consumers. Additionally, the lowest denomination coin is often used for small charitable donations, supporting the idea that every cent has value.

Global Trends in Low-Denomination Coinage

The debate over the penny in the United States mirrors similar discussions and actions taken by other nations worldwide. Several countries have already phased out their lowest-denomination coins due to factors such as high production costs and diminished purchasing power. Canada, for instance, discontinued its penny in 2012.

Australia removed its 1- and 2-cent coins from circulation in 1992. Similarly, New Zealand eliminated its 1- and 2-cent coins in 1990, later discontinuing its 5-cent coin in 2006. Within Europe, some countries have also ceased minting 1- and 2-cent euro coins, opting instead for rounding rules for cash transactions. These international precedents demonstrate a global trend towards reassessing the necessity of very low-value coinage.

Current Discussions and Legislative Outlook

In the United States, discussions surrounding the penny’s future have gained renewed attention, particularly with recent legislative proposals. On April 30, 2025, a bipartisan group of lawmakers introduced the “Common Cents Act” in Congress. This proposed legislation aims to direct the Treasury Department to cease production of the one-cent coin within a year of the bill’s enactment.

This legislative effort follows an announcement by President Trump in February 2025, indicating his directive to the Treasury Department to halt penny production due to its rising cost. Subsequently, on May 22, 2025, the U.S. Mint confirmed plans to stop producing pennies starting in 2026. While production would cease, existing pennies would remain legal tender indefinitely. Past attempts to discontinue the penny through legislative means have not succeeded, underscoring that any definitive change requires significant political will and broad consensus.