In recent years, I haven’t given much thought to pennies or used them frequently, as I’ve largely transitioned to cashless transactions. However, when President Donald Trump announced an initiative to cease the minting of the penny altogether, I began to reflect on the role that unassuming copper-colored coin continues to play in the US economy and the potential implications of such a change.
Amid the recent torrent of Trump’s often controversial executive actions, he declared on a Sunday evening that he had directed Treasury Secretary Scott Bessent to stop producing the 1-cent coins, designating it as an instance of unnecessary government expenditure.
“For far too long, the United States has minted pennies, which actually cost us over 2 cents to make,” Trump stated in a post on his Truth Social platform. “Let’s eliminate waste from our great nation’s budget, even if we tackle it penny by penny.”
The concept of eliminating the penny is not new. Economists have advocated for its removal for years, citing not only the production costs but also its dwindling utility. What do people even spend pennies on today? This idea has found support from former presidents across party lines, including Republican Gerald Ford and Democrat Barack Obama.
I’m not alone in my shift away from coins and cash. According to a study released last year by Capital One Shopping Research, 11% of Americans no longer use cash at all, with 73% relying on it for less than half of their transactions. The study predicted that by the end of 2025, over 51% “of American consumers will use no cash in an average week.”
So, what would be the consequences of eliminating the penny for you and the broader economy? Continue reading for the answers we’ve gathered so far. For additional financial insights, discover whether you’re eligible for this year’s child tax credit and why Elon Musk may not have completely dismantled Direct File.
Can Trump really end the penny?
Legally speaking, the president does not have the authority to initiate or halt the production of any form of currency; that power rests with Congress, and Trump’s plan would require a legislative act to become realized.
However, many of the president’s recent directives have involved issues beyond his scope, such as attempts to cancel congressionally sanctioned expenditures. He will likely persist in pressing for the cessation of penny production, potentially encountering pushback from the US Mint or motivating Republicans in Congress to devise a plan in accordance with his objectives.
What is the cost of making a penny?
A significant point against the penny — one Trump highlighted this week and has been cited by economists over the years — is that it costs more to produce than its actual value. Considering the costs of raw materials (zinc and copper) and the minting process, producing a penny that holds a 1-cent value costs over 3 cents.
What impact would removing pennies have on prices?
In today’s economy, a coin worth one cent serves little purpose for purchases unless you need to make exact change. At this juncture, its primary function is assisting vendors in providing change.
Countries that have abolished 1- or 2-cent coins — like 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 measure were adopted in the US, even assuming all vendors rounded their prices upward, the effect would likely be minimal compared to the current inflation rates.
How many pennies are currently in circulation?
A 2024 report from The New York Times estimated that approximately 250 billion pennies were circulating as of last year. Determining how many pennies are actually in active circulation — used for purchases instead of lost or discarded — is challenging, as the US Mint issues billions of new pennies annually to offset those lost.
What should I do with my pennies?
If Trump’s initiative were to be enacted, it wouldn’t necessarily imply that pennies would cease to be legal tender. You could still use your existing pennies to make purchases or receive them as change, since it would take a considerable amount of time for the remaining pennies in circulation to diminish.
Some unique design pennies might gain value as collector’s items, so you might consider keeping a few just in case.
Will nickels also be phased out?
The cessation of penny production, many economists argue, would likely lead to scrutiny of nickels as well. According to a 2024 report by the US Mint, the 5-cent coin also costs more to produce than its face value, with each nickel costing nearly 15 cents to manufacture. Dimes, quarters, half-dollars, and paper currency currently cost less to produce than their value.
Mark Weller, executive director at Americans for Common Cents, voiced strong opposition to Trump’s proposal to abandon penny production, arguing that it would exacerbate financial losses stemming from nickel production, countering any savings achieved by eliminating pennies.
“It would negatively impact consumers and the economy alike,” Weller stated. “In fact, it would not save money but instead increase government deficits and induce unforeseen economic repercussions.”
For more information, find out why you may save more than you expect by dropping Amazon Prime.
