In a landmark policy shift, the U.S. Treasury Department has confirmed it will cease production of the penny by early 2026, putting an end to a coin that has been in circulation since 1793.
The move follows a directive issued by President Donald Trump in February 2025 and has gained bipartisan support in Congress, signaling a rare political consensus on a longstanding economic debate.
“For far too long the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful!” President Trump said in a social media post, citing figures that put the cost of minting a penny at 3.6 cents—more than triple its face value.
Economic Rationale Behind the Decision
The Treasury estimates that halting penny production will save taxpayers approximately $56 million annually. Officials confirmed that the final shipment of penny blanks has been ordered, and the U.S. Mint will only produce coins using the remaining inventory.
Once the current stock is exhausted:
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No new pennies will be minted.
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Existing coins will remain legal tender and can still be used in transactions.
Rounding and Retail Impacts
With the penny being phased out, cash transactions will be rounded to the nearest five cents. However, electronic payments will remain unaffected, allowing for precise pricing in digital purchases.
Retailers and banks are expected to adjust smoothly, as Canada, Australia, and New Zealand have already adopted similar policies, eliminating their lowest-denomination coins with minimal disruption.
Legislative Backing
Two bipartisan bills—The Make Sense Not Cents Act and The Common Cents Act—have been introduced in Congress to solidify the penny’s retirement in law. These bills reflect a growing consensus that the coin is economically obsolete in an increasingly digital and card-based economy.
Public and Expert Opinions
Supporters of the move argue that:
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Pennies are often wasted, lost, or stored in drawers.
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Digital payments now dominate, reducing reliance on small coins.
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Taxpayer money can be better allocated elsewhere.
However, some economists, charitable organizations, and traditionalists oppose the change, arguing:
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Pennies help maintain pricing accuracy, especially in cash-heavy economies.
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Donation drives often rely on low-denomination coins.
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Removing pennies may increase reliance on more expensive coins, such as the nickel, which now costs nearly 14 cents to produce.
Historical Context
The penny, first introduced in 1793, has featured President Abraham Lincoln’s profile since 1909 and holds sentimental value for many Americans. But as inflation and digital payment systems reshape modern economics, its practical use has sharply declined.
There are currently an estimated 114 billion pennies in circulation.
What’s Next?
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No new pennies will be made after early 2026.
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The U.S. Mint will continue producing nickels, although concerns about their rising cost remain.
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Policymakers may next evaluate the cost-efficiency of other denominations.
The U.S. now joins a growing list of countries that have phased out low-value coins in favor of economic efficiency and modernized transaction systems.
