(NEXSTAR) — Grab your coin purse: The U.S. may be on the verge of ditching its penny. The U.S. Treasury is reportedly gearing up to stop putting new one-cent coins into circulation by early next year, The Wall Street Journal reported on Thursday, which could change the way you pay.
The Treasury made its final order of penny blanks this month, the WSJ reported, citing a spokesperson, meaning the Mint will only produce pennies until it runs out of blanks. The end of the penny will mean businesses will have to round up or down prices to the nearest five cents, the spokesperson also told the WSJ.
The Treasury and the U.S. Mint, which is responsible for producing the nation’s coins, did not immediately respond to Nexstar’s requests for comment.
Thursday’s report comes months after the Department of Government Efficiency (DOGE) set its sights on the penny and President Donald Trump called on the Treasury Department to stop minting new one-cent coins, calling them “wasteful.”
It costs roughly 3.69 cents to make one penny, per the latest data from the U.S. Mint. Last year marked the 19th consecutive year that the penny (and the nickel) “remained above face value” when it comes to production costs.
Earlier this month, a bipartisan bill to halt penny production was introduced by Senators Jeff Merkley (D-Ore.) and Mike Lee (R-Utah). It was one of a handful of bills that have been brought forth since Trump’s comments on the one-cent coin. Merkley and Lee did not immediately respond to Nexstar’s requests for comment regarding Thursday’s report.
Under the Constitution, Congress is responsible for regulating the Federal Reserve and overseeing our money.
The U.S. wouldn’t be the first country to ditch its lowest-denomination coin. (It wouldn’t even be the first time we’ve stopped producing a coin.)
What happened when Canada ditched its penny?
Canada parted ways with its penny in the early 2010s for the same reasons the U.S. has expressed regarding its penny. At the time, however, it cost Canada 1.6 cents to produce one new penny, vastly less than what the U.S. is paying now, but enough to spur the government to do away with the coin.
The Royal Canadian Mint worked with financial institutions and charities to begin collecting the nation’s pennies, essentially putting the distribution process in reverse, Alex Reeves, then the Senior Manager of Communications for the Mint, told PBS News in 2014. Old pennies were turned in and melted down to extract their valuable metals.
Without a one-cent coin, cash transactions had to change. Cash purchases are now rounded to the nearest nickel: For instance, a $19.82 purchase becomes $19.80 while $19.83 becomes $19.85. Payments with checks or debit or credit cards are not rounded.
The U.S. appears likely to do the same, a Treasury spokesperson indicated to the Wall Street Journal.
Will pennies become valuable collector’s items?
The short answer is probably not.
Ten years after Canada stopped minting the penny, collectors said the novelty value of the coin did not skyrocket. Todd Sandham, owner of a coin and jewelry shop in Ontario, told Canadian outlet CTV News in 2023 that even someone who brought in a jar of pennies to sell would “get about a penny and a half for them.”
Experts at All About Coins in Salt Lake City recently told Nexstar’s KTVX they don’t foresee a spike in the value of Abraham Lincoln’s coin, either.
“I don’t think that we’re ever going to see a day where like a 2024 penny is going to be worth so much more,” store clerk Casey Hackford-Peer explained. “Maybe in 200, 300 years, but not in my lifetime.”
The penny will also remain legal tender.
Are there consequences of ending penny production?
Outside of rounding cash transactions, advocates for keeping the one-cent coin say there may be additional consequences of ditching the penny.
First is the practicality. While you’re likely using cash less, when you do, you expect to receive the exact change you are owed. Without pennies, it would be difficult to, say, give you change on a $19.87 purchase if you pay with a $20.
It could also impact those who do not use credit or debit cards and instead rely on cash and coins. Doing away with a penny could even prove costly, in a sense.
In a 2022 report from the Federal Reserve, officials warned that “drastically reducing or ending the production of the penny” could lead to a “significant flowback of coin from consumers and businesses seeking to turn in their pennies.” The same report suggested, however, that reducing penny production could save the Mint up to $100 million annually.
What about nickels?
While the U.S. is technically “losing” money on the penny, the disparity between nickel production costs and its face value is even worse.
According to the U.S. Mint, producing nickels has also remained above face value for nearly 20 years. In fiscal year 2024, it cost nearly 14 cents to make the five-cent piece.
Across the other coins — the dime, quarter, and half-dollar — the situation is much better.
Per the latest U.S. Mint report, it costs less than six cents to make a dime ($0.0576). To make a quarter, it costs about 15 cents ($0.1468), and nearly 34 cents for a half-dollar ($0.3397).
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