US to halt penny production: Will it remain legal tender?
The US Treasury may soon halt the production of the US penny at their national mints, according to a recent announcement. The lowest value coin of the United States would eventually be phased out by the US Treasury, meaning that there would be some slight changes to Americans' daily transaction habits.
According to The Wall Street Journal, which first reported on the decision, the US Treasury has placed its final order for penny blanks, and production will end when the supply runs out. This could be sometime around 2026.
For starters, the production of a single penny is more than its real value. According to the US Mint, each penny now costs about 3.7 cents to mint and distribute, almost four times its actual value. This makes it a burden on taxpayers as well, with the government losing nearly $85 million in 2024 by producing about 3 billion pennies. If the US Treasury stopped minting and the circulation of pennies, it would save nearly that much amount for the taxpayers.
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Only earlier this year, Donald Trump had termed the American penny as "wasteful" and even directed Treasury Secretary Scott Bessent to stop producing the coin.
The penny is slated to continue being a legal tender, even after the US Mint halts production. Americans can still use pennies for cash transactions, depositing them at banks, or keep them as a collector's item. As of now, there are no announcements for the recall of the American penny by the government. Financial institutions may continue accepting them on the basis of their existing value. For cash transactions, Americans will have to start rounding up to the nearest 5 cents, with nickels having the smallest value thereafter. Card or check transfers will see the same transaction process, with no change.
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