The U.S. Treasury Department has confirmed it will stop producing pennies, marking the end of a coin that has been part of American currency for over 230 years.
The decision, announced on May 22, 2025, comes as the cost of making pennies far exceeds their value. The U.S. Mint placed its final order for penny blanks this month and will cease production once the supply runs out, likely by early 2026. This move is expected to save taxpayers millions annually.
Why the Penny Is Being Phased Out
The primary reason for halting penny production is cost. In 2024, the Mint reported that each penny cost 3.69 cents to produce—a 20% increase from the previous year. The government loses money on every penny made.
In 2024, the Mint produced nearly 3.2 billion pennies and reported losses of $85.3 million. U.S. Treasury Officials project $56 million in annual savings from materials alone, with more savings from reduced facility use.
The penny’s role in transactions continues to shrink as digital payments grow. Countries like Canada, which stopped producing its penny in 2012, have shown that eliminating low-value coins can work without major disruption.
Background of the Decision
The penny’s future has sparked debate for decades. Its production cost first exceeded one cent in 2006, sparking discussions in multiple administrations.
In 2015, then-Treasury Secretary Jacob Lew considered phasing out the penny but didn’t take action. Recently, bipartisan support increased, with Senators Mike Lee (R-Utah) and Jeff Merkley (D-Ore.) introducing the “Make Sense Not Cents Act” in May 2025 to authorize its elimination.
The act called the coin inefficient. Lee said, “No private business would produce something at a 4x loss.” Public opinion, amplified by posts on X, also favored ending production, citing the penny’s limited utility in modern commerce.
Who Made and Confirmed the Decision
President Donald Trump played a key role in ending penny production. In February 2025, he posted on Truth Social, “For far too long the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful!”
He directed Treasury Secretary Scott Bessent to end production’s. Treasury Department confirmed the decision and told outlets like The Wall Street Journal and Reuters that it placed the final order of penny blanks in May 2025.
A Treasury spokesperson, who spoke anonymously due to a lack of public authorization, explained the plan to mint pennies until the blanks run out. The secretary has authority to halt production based on national needs, though Congress controls currency specifications.
What Happens Next
Pennies will remain legal tender, and over 114 billion still circulate. As supplies drop, businesses may round cash transactions to the nearest nickel.
The Treasury has asked state and local governments to guide retailers on adjusting sales taxes for rounding. The shift could raise demand for nickels, which currently cost 13.78 cents to produce a new challenge.
Treasury Secretary Bessent told lawmakers the department is exploring ways to reduce nickel production costs, possibly by changing their metal composition.
The phase-out supports broader fiscal goals, including those flagged by Elon Musk’s unofficial Department of Government Efficiency in January 2025. Though the savings are modest compared to the $6.8 trillion federal budget, the move aims to reduce government waste.
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