When was the last time you used a penny for a purchase? Have you even given them much thought beyond collecting them as change or discovering them in the depths of your couch? Economists have been contemplating this issue for quite some time, and you’ll be surprised to learn how many of them are in favor of eliminating the coin altogether—a proposition that has also gained traction with President Donald Trump.
Amid his recent wave of often controversial executive orders, Trump declared on Sunday evening that he instructed Treasury Secretary Scott Bessent to cease the production of 1-cent coins, highlighting it as an example of wasteful government expenditure.
“For far too long, the United States has minted pennies, which actually cost us more than 2 cents,” Trump stated in a post on his Truth Social platform. “Let’s eliminate the waste from our great nation’s budget, even if it’s a penny at a time.”
The idea of ending penny production is not new. Economists have suggested abolishing pennies for years, pointing to their production costs and diminishing utility. What do people actually use pennies for nowadays? This sentiment has been echoed by past presidents from both parties, including Republican Gerald Ford and Democrat Barack Obama.
Personally, I’ve largely shifted away from using cash altogether, and I’m not alone in this trend. A study conducted by Capital One Shopping Research last year found that 11% of Americans do not use cash at all, with 73% using it for less than half of their purchases. The study forecasts that by the end of 2025, over 51% of “American consumers will use no cash in a typical week.” This movement towards a cashless economy certainly undermines the penny’s worth.
So what would the elimination of the penny imply for you and the broader economy? Read on for insights we have at this stage. For more financial coverage, discover if you’re eligible for the child tax credit this year and why Elon Musk’s actions didn’t necessarily affect Direct File.
Can Trump really end the penny?
In strictly legal terms, no, the President lacks the authority to initiate or terminate the production of any currency. That power resides with Congress, and Trump’s plan necessitates legislative action to come to fruition.
However, many of the President’s recent orders have involved issues beyond his purview, such as attempts to obstruct congressionally sanctioned spending. He is likely to continue advocating for the cessation of penny production, which could provoke resistance from the US Mint or encourage congressional Republicans to formulate a plan aligned with his objectives.
What does it cost to create a penny?
A significant argument against pennies—one highlighted by Trump this week and by economists over the years—is that pennies cost more to produce than their value suggests. Considering the expenses for raw materials (zinc and copper) and the manufacturing process, a penny, valued at 1 cent, costs over 3 cents to produce.
What impact would eliminating pennies have on prices?
In today’s economy, a coin worth one cent offers limited utility for making purchases unless exact change is required. Currently, they serve primarily to assist vendors in providing change.
Countries that have disposed of 1- or 2-cent coins—such as Australia and New Zealand—addressed this issue by either mandating or encouraging vendors to round their prices to the nearest five-cent increment. If a similar approach were adopted in the US, even if vendors rounded all prices upwards, it would likely be negligible compared to current inflation rates.
How many pennies are currently in circulation?
A 2024 report from the New York Times estimated that nearly 250 billion pennies were in circulation as of last year. The active number of pennies actually used for transactions, as opposed to those lost in couches or sewage systems, is hard to assess. This is largely because the US Mint produces billions of new pennies annually to replace innumerable lost coins.
What should I do with my pennies?
If Trump’s directive were to take effect, it wouldn’t necessarily render pennies illegal. You could still use your existing pennies for purchases or receive them as change, as it would take several years for the remaining stock of pennies to be depleted.
Some of the remaining pennies with distinctive designs might become collectibles, so consider saving a few just in case.
Will nickels also be phased out?
The cessation of penny production, many economists argue, could escalate the conversation around nickels as well. According to a 2024 US Mint report, the 5-cent coin also costs more to make than its face value, with each nickel costing nearly 15 cents to produce. Dimes, quarters, half-dollars, and paper currency currently cost less to manufacture than their worth.
In an interview with ABC News, Mark Weller, an executive director at the Americans for Common Cents organization, strongly opposed Trump’s proposal to end penny production, arguing that doing so would intensify the financial losses from producing nickels, which in turn would negate any savings achieved by eliminating pennies.
“It would be detrimental for consumers, and it would harm the economy,” Weller stated. “This would not save money; rather, it would escalate government losses and create some unintended economic repercussions.”
For further insights, find out why opting out of Amazon Prime might save you more money than you anticipated.
