Almost two centuries later, the US government has stopped producing penny. Cancellation of US penny means that in time these coins you grew up will no longer be in circulation.
For many Americans, pennies are more than just a pocket change. This is a nostalgic reminder of childhood piggy bank, accurate change, “Penny saved earned pennies.” Although often overlooked in everyday life, Penny has been constant in wallets, registers and charity jars for generations.
This change will affect everything from retail sales prices to coin collectors. And a bit of our history is lost as Penny was removed from production.
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Reasons behind the US Penny cancellation
High production costs encourage decisions to cancel penny. According to the 2024 annual report from the US Mint, a penny costs 3.7 cents. That is, you spend more penny production than the coins are worth.
In February, President Donald Trump called on the Treasury to halt penny production. “For a long time, the US has been minting pennies, and it costs literally more than two cents. This is a waste!” Trump wrote about the true society. “I have instructed the US Treasury secretary to stop producing new penny.”
The Treasury announced that it would place its last order for Penny Blanks in May and would cease production of the penny. These blanks manufactured to Penny will disappear in early 2026, at which point Penny production will cease.
Due to the high cost of coin production, several other countries have now phased out the lowest sect coins.
Australia ended production of 1 and 2 cent coins in 1992, and Canada phased out the penny in 2012. New Zealand eliminated 1 and 2 cent coins in 1990, then canceled 5 cent coins in 2006.
Production costs are cited as the main reason for suspending pennies, but the US is moving towards a cashless economy, reducing demand for coins and cash.
According to data from the Pew Research Center, as of 2022, around 41% of Americans said they would not use cash for purchases in a typical week, starting from 29% in 2018 and 24% in 2015. This trend suggests that consumers are increasingly turning to digital payments for everyday transactions.
Penny’s historical significance
(Image credit: Getty Images)
According to US Mint, Penny was one of the first coins made by Mint, which was created after its founding in 1792. The original penny featured a woman with flowing hair to represent freedom. Its design lasted over 60 years, with early pennies made of pure copper, larger than today’s coins.
In 1857, the penny was redesigned to be smaller and more practical for everyday use. The composition also changed from pure copper to an alloy of 88% copper and 12% nickel. This version featured a flying eagle on one side and a wreath on the other. In 1909, to celebrate the 100th anniversary of Abraham Lincoln’s birth, his portrait was added to Penny, becoming the first American coin with a real person.
What does the US Penny cancellation mean for consumers and businesses?
Pennies remain in fiat currency. This means you can still use it to buy. However, once production is finished and coins fall out of circulation, their availability gradually decreases. When that happens, many companies will need to adopt a round-up of cash transactions and adjust the total to an increment of nearly 5 cents for cash payments.
This process, sometimes called “rounding in the register,” has already been implemented in countries such as Canada and Australia following the removal of the lowest sectarian coins. Electronic transactions such as credit and debit card payments will continue to be processed accurately.
This shift could also mark the end of familiar pricing strategies such as $4.99 and $19.99. Without pennies, retailers can start rolling prices to the nearest dollar for ease. Over time, both consumers and businesses alike need to adapt to the new norms where the smallest coin in circulation is nickel.
Cancelling US penny makes sense for coin collectors
If you’re holding years old or rare pennies, don’t expect a penny cancellation to increase the price of rare coins. The final end of the penny may generate some interest in collecting these coins, but it is unlikely to affect the value of a new penny.
Collectors continue to focus on coins with historical importance, casting errors, or limited production execution. Modern pennies, especially those produced in large quantities over the past decades, are unlikely to see important appreciation.
The total number of pennies in circulation will eventually decrease, but unless the coin already has collectible value, it will not raise the price alone due to rarity. For most people, the end of a penny is more about nostalgia than profit.
What to do with your penny
Pennies remain fiat currency and can continue to be used for daily purchases. If you have a stash of old coins, it may be worth exploring in detail to assess their potential value. Some rare or historically important pennies can bring more value to collectors.
Pennies become less common over time, so you might consider considering putting them aside some, especially if they are the sentimental type. For those trying to brighten up the coin jar, most local banks will accept pennies for deposits or exchanges, but you may need to roll the coins ahead of time.
For at least for now, your penny is still buying power, even if you hug them or pay them cash.
