US Ends Penny Production, Seeks Savings Amid Cash Decline
The US has stopped minting the penny, which costs more to produce than it’s worth, aiming to cut losses and adapt to a digital payments shift.
The United States has officially halted production of the one-cent coin, ending over two centuries of minting. The decision responds to rising minting costs, diminishing use of cash, and aims to redirect savings amid shifting payment trends.
What We Know
The U.S. Mint struck its final batch of pennies on November 12, 2025, following a February directive from President Trump to halt new production. The coin will remain legal tender, but new supply will no longer be created. Treasury officials expect to save roughly $56 million annually.
Producing each penny costs approximately 3.69 cents—nearly four times its face value—resulting in a 2024 seigniorage loss of $85.3 million.
Cash transactions have plummeted in recent years, accounting for just 16% of payments, contributing to declining demand for low-denomination coins.
The retirement may impose a rounding “tax” on cash users: a Federal Reserve analysis estimates consumers could lose around $6 million annually if cash payments are rounded to the nearest nickel.
What It Means
The decision reflects pragmatic cost-cutting, recognizing that pennies no longer serve a meaningful economic purpose amid digital-first spending. Eliminating an inefficient production run is projected to yield substantial savings for taxpayers.
However, the change could marginally affect low-income and cash-dependent groups through rounding. While small in aggregate, these impacts warrant attention during the transition away from penny-centric cash transactions.
The Backstory
Penny elimination has long attracted bipartisan support—from President Trump and Congress alike—and follows patterns seen in countries like Canada and Australia that phased out low-denomination coins with limited disruption.
What’s Next
Pennies will gradually disappear as existing stocks circulate and wear, potentially becoming collector items. Policymakers may face renewed debate over phasing out the nickel, which similarly costs more to produce than its value.
