After 230 years, the US mints have ceased producing one-cent coins. The final “penny” was minted last Wednesday in Philadelphia, concluding a longstanding monetary tradition in US history.
President Donald Trump implemented this measure in February after the Treasury Department found that producing the coin now costs about four cents—four times its face value. The rising costs of copper and zinc, which compose the modern penny, prompted this decision. The White House cites economic reasons, as the penny is less commonly used in daily transactions and burdens the state budget. Treasury Secretary Brandon Beach announced the last coins would be auctioned off to benefit heritage preservation programs. Though minting ceased in June, one-cent coins remain legal tender, with about 114 billion in circulation. First introduced in 1793 and featuring President Abraham Lincoln since 1909, the penny holds deep historical roots. In future cash transactions, US businesses will round prices to the five-cent (“nickel”) denomination. Some trade associations have criticized the lack of government guidance on implementing this new rule. US media report that halting penny production is projected to save the state around $56 million annually. The decision carries both financial and symbolic weight, signaling the end of an era where small coins contributed to national identity and financial culture. Analysts view this as part of a broader shift towards digital payments and optimizing government expenditure. Experts caution that, beyond its monetary role, the Lincoln penny is a historic and cultural icon, part of the national memory. Last coins are expected to attract collectors, potentially fetching thousands of times their face value at auction.
European parallels
The topic of removing the smallest coins is also under discussion in Europe. In several eurozone countries, cash payments are rounded to the nearest five cents by law. Although one- and two-cent coins remain legal tender, they are gradually fading from everyday use. In Germany, about 80 percent of one-cent and 75 percent of two-cent coins are not in circulation—they are kept at home, lost, or donated. The German Bundesbank and the National Forum for Cash revisited this issue earlier in the year.
“Economic and environmental costs of producing, packaging, and transporting these coins are disproportionately high compared to their value,” said Bundesbank Board Member Burkhard Balz. Eliminating small denominations would enhance efficiency and sustainability in money circulation, reducing administrative costs for retailers and banks. However, not all agree. The HDE trade association is not actively advocating for rounding rules, noting that odd pricing is often a competitive tool in retail. Consumer organizations add that many dislike carrying small coins due to the inconvenience in daily life. A Eurobarometer survey shows a majority of Europeans support abolishing one- and two-cent coins, arguing both economic and environmental reasons—their production has a high carbon footprint with minimal benefit. Data from the European Central Bank shows these coins account for over half by number but only about 7 percent in value.
Washington’s decision may signal a new global trend in monetary policy, with countries considering both nominal and real money values.
Illustrative Photo by Pixabay: https://www.pexels.com/photo/copper-colored-coin-lot-259165/
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