US Treasury Pulls The Plug On Penny Production After 231 Years, Eyes $56 Million In Immediate Annual Savings

In a landmark decision, the U.S. Treasury Department has declared that the production of pennies will be discontinued from next year, bringing to a close two centuries of circulation.

What Happened:  The call to halt the minting of pennies was taken by President Donald Trump earlier this year, who termed the coins as “wasteful”. The cost-effectiveness and usefulness of pennies have been subjects of discussion for a long time. Elon Musk‘s Department of Government Efficiency (DOGE) brought attention to the cost of penny production in January, reported The Wall Street Journal.

The Mint projects that halting production would lead to an immediate annual savings of $56 million due to lower material costs. Since their introduction in 1793, pennies have been among the first coins to be minted in the U.S. However, in the past decade, the cost of minting these coins increased from 1.3 cents to 3.69 cents per coin, as stated by the Treasury.

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Why It Matters: The decision has sparked a debate, with some arguing that penny production is a waste of resources, while others believe it helps maintain low prices and supports charity fundraising. Experts say that businesses will have to revise their pricing strategies due to the phase-out.

Notably, several countries have taken similar steps in the past. Canada stopped minting its one-cent coin in 2012 due to high production costs and diminishing purchasing power. The U.K., witnessing a decrease in cash usage, discontinued production of new coins in 2024.

President Trump had directed the Treasury Department to stop new penny production, reigniting the debate over America's costliest small change. Americans discard up to $68 million in coins annually, with many coins left at airport security or used in art and decor. Additionally, about 60% of circulating coins—worth up to $14 billion—are stored in coin jars, according to the Federal Reserve.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.