The United States has concluded the production of its one-cent coin, commonly known as the penny, after more than 230 years. The Philadelphia Mint struck its final batch of pennies on Thursday.
Production Cessation Details
Although the coins will remain in circulation, the cessation of production has prompted businesses to begin adjusting prices due to the increasing scarcity of pennies. The government states that this measure aims to generate savings.
Economic Rationale
Pennies, which feature President Abraham Lincoln and are composed of copper-plated zinc, cost approximately four cents each to manufacture. This figure represents more than double the cost from a decade prior, according to data from the Treasury Department. The decision to halt production is projected to save approximately $56 million annually.
Circulation and Usage
Officials contend that the increasing prevalence of electronic transactions has diminished the necessity of the penny, which first entered production in 1793. The Treasury Department estimates that around 300 billion pennies will continue to circulate, a volume described as significantly exceeding commercial requirements. A 2022 government analysis indicated that approximately 60% of all US coins, equating to an estimated $60-$90 per typical household, are stored at home and not actively used in transactions.
Consumer Impact
As businesses adjust by rounding prices, a study by researchers at the Richmond Federal Reserve projected that this change could lead to an estimated $6 million increase in annual costs for consumers.
International Precedents
Other nations have similarly discontinued their lowest-value coinage. Canada ceased production of its one-cent coin in 2012. Australia and New Zealand withdrew their one and two-cent coins in the 1990s, with New Zealand also halting five-cent coin production in 2006. The United Kingdom considered scrapping 1p coins in 2018, a proposal later withdrawn, but did halt the production of new 1p and 2p coins in 2024, citing sufficient existing circulation.