The U.S. Treasury placed its final order for 1-cent blanks this month, according to the Wall Street Journal. The U.S. Mint will continue to produce the coins on order, but will stop production once the inventory is released.
The reason for the decision to phase out the US 1 cent coin comes from the sharp decline in demand for this currency unit while the cost of producing the 1 cent coin exceeds its value.
Over the past 10 years, the cost of producing a penny has increased from about $0.01 to nearly $0.04. The Treasury expects to save some money when the coin production process ends and is discontinued.
The US Mint estimates that discontinuing production of the cent coin will save $56 million in annual material costs.
The move comes after President Donald Trump pushed to end the minting of one-cent coins through an executive order in February.
In the US Congress , some lawmakers from both parties are also working to end production of the penny. In early May, Republican Senator Mike Lee and Democratic Senator Jeff Merkley introduced the Make Sense Not Cents Act, which calls for ending production of the penny to save taxpayers millions of dollars each year.
Americans are also not using cash as often. According to the Federal Reserve, cash is the third most used payment method, accounting for 16% of payments in 2023, down 2% from 2022. When the penny stops being produced, there won’t be enough pennies in circulation for everyday cash transactions. Businesses will need to start rounding up or counting to the nearest quarter. Non-cash transactions will still be priced at the actual dollar amount.
The one-cent coin was one of the first coins produced by the US Mint after its establishment in 1792. The original design on the coin featured a woman with her hair in a bun, symbolizing liberty. In 1909, President Abraham Lincoln was replaced on the coin to commemorate the 100th anniversary of his birth. The original coin was large and made of pure copper, while today's improved one-cent coin is smaller and made of copper and zinc.
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