United States President Donald Trump has ordered the Treasury to stop minting new pennies, reviving an old debate about the value of the one cent coin.
The penny, Trump argued in a post on his Truth Social platform on February 9, is “wasteful” because the cost to make it far exceeds its currency value.
“Let’s rip the waste out of our great nation’s budget, even if it’s a penny at a time,” he wrote.
Why the push to retire the coin?
Despite being worth only one cent, each penny costs nearly four cents to produce, according to the US Mint. That’s due to the cost of the raw material – mostly zinc – and the moulding process.
Some 3.2 billion pennies were minted in 2024, meaning a production cost of $12.8bn.
Centuries of inflation have also made the penny, first minted in 1793, virtually obsolete. It has become so insignificant that it’s no longer even practical for the cheapest retail items—such as a gumball or a single piece of candy.
“People don’t want them. They don’t use them,” Larry Jackson, a 65-year-old coin dealer in Atlanta told the Reuters news agency. “They sock them away in cans and drawers and jars … Even a 30-pound bag won’t fetch you $50.”
In addition, the use of the penny tends to clog up retail transactions. If cashiers can skip counting pennies, they’d save 2.5 seconds per check-out, according to a 2006 study by the National Association of Convenience Stores.
Is there an argument to keep it?
Yes. Some penny advocates contend that the currency helps keep prices in check.
Businesses, they argue, will be more likely to round off prices upwards than downwards without the penny. That could have a marginal inflationary impact.
Additionally, they argue, pennies serve as a valuable source of funding for charities: Each individual contribution might be tiny, but it all adds up.
Others point out that scrapping the coin may force the government to churn out more nickels, an even bigger financial burden. Worth five cents, the nickel costs 13 cents apiece to produce.
Ultimately, however, most economists say losing the penny would have a negligible effect on consumers. That’s because the vast majority of transactions are already cashless.
“I think at some point in history cancelling the penny would have been a bigger deal, but now people don’t even carry them in their pockets,” said economist Sean Snaith. “They’re largely not in circulation.”
Have other countries tried scrapping the penny?
Yes, countries like Canada, New Zealand, Australia and the Netherlands have all phased out their smallest-denomination coins.
When Canada stopped minting the penny in 2013, it saved an estimated $11m annually, according to the Canadian government. Many retailers began rounding cash purchases to the nearest five-cent mark, while the government collected and recycled the pennies for their copper and zinc content.
US lawmakers have long advocated for similar measures. Starting in 1989, the late Arizona Congressman Jim Kolbe started a decades-long bid to eliminate the penny, introducing several failed bills to scrap it. “The penny has been a nuisance for years,” he said back in 2006.
Is it legal for Trump to stop penny production on his own?
It’s unclear.
Congress, which oversees the US Mint’s operations, would likely need to pass a law to permanently retire the coin. But some legal experts say Trump could simply direct the treasury secretary to stop producing them.
Legal scholar Laurence H Tribe pointed out that the secretary has the authority to mint coins in whatever amounts deemed necessary – potentially zero for the penny.
“Unlike a lot of what the new administration [of President Trump] has been doing pursuant to the flood of executive orders since January 20, this action seems to me entirely lawful and fully constitutional,” said Tribe.
Robert Triest, an economist professor at Northeastern University, says “the process of discontinuing the penny in the US is a little unclear”.
“It would likely require an act of Congress, but the secretary of the Treasury might be able to simply stop the minting of new pennies,” Triest was quoted by Northeastern Global News as saying in a January news article. Phasing out the penny, he added, would raise questions about how to round cash transactions and the use of people’s existing collections of pennies.
