Say Goodbye To The Penny, The US Treasury Announces Plans To Phase Out The Coin

• The US Treasury will stop putting new pennies into circulation at the beginning of 2026, it was announced on Thursday
• Pennies cost nearly 4 cents to manufacture, meaning the savings from their discontinuation could be upwards of $50 million
• President Donald Trump announced in February that he'd instructed the Treasury Department to stop production of 1-cent coins

The US Treasury has begun phasing out the penny, it said in a statement to the Wall Street Journal late last week.

The department made its final order of penny blanks earlier this month, and the U.S. Mint will continue to manufacture the 1-cent coins until the inventory blanks are used up, the Journal reports. At that point, no new pennies will enter circulation. When there are no longer enough pennies for everyday cash transactions, businesses will have to round up or down to the nearest nickel.

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The announcement comes as no surprise. Pennies cost more to produce than they're worth, and presidents Barack Obama and Donald Trump each called for the Treasury to stop production.

"For far too long the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful! I have instructed my Secretary of the US Treasury to stop producing new pennies. Let’s rip the waste out of our great nations budget, even if it’s a penny at a time," Trump said on Truth Social in February. 

Trump actually undersold the argument. According to the U.S. Mint's 2024 Annual Report, it actually costs closer to 4 cents to make each penny. As such, the U.S. Mint is projecting $56 million in savings costs each year, thanks to reduced material costs, according to the Journal. 

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Congress sets the rules for currency production and holds the power to eliminate or discontinue coins. However, the Treasury told the Journal it has the power to halt production of new coins.

"Given the cost savings to the taxpayer, this is just another example of our administration cutting waste for the American taxpayer and making the government more efficient for the American people," a Treasury spokesperson told CNN. 

One reason the US produces so many pennies each year is that a significant number leave circulation. In 2024, the Journal reported that sustainable waste company Reworld found that up to $68 million in coins are thrown away annually. Pennies, in particular, often end up sitting in coin jars or dropped on the street, where they become garbage instead of currency, the company says.

"When people start leaving a monetary unit at the cash register for the next customer, the unit is too small to be useful," Gregory Mankiw, a former chair of the White House Council of Economic Advisers under President George W. Bush, told CNN.

The US won't be the first country to do away with its smallest coin. Australia eliminated its 1-cent and 2-cent coins in 1992, and Canada got rid of its pennies in 2013.

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