After more than 230 years in American pockets, the penny will soon become a relic of monetary history as the US Treasury announces plans to end production of the iconic one-cent coin.

At a Glance

• The US Treasury Department will stop manufacturing pennies, with production ending in early 2026
• Each penny costs approximately 3.7 cents to produce and distribute, creating significant financial losses
• Ending penny production will save the US Mint an estimated $56 million annually
• The government lost $85 million last year due to penny production costs
• Americans can continue using the estimated 114 billion pennies already in circulation

Financial Rationale Behind the Decision

The Treasury Department’s decision to cease penny production stems from simple economics – each penny costs far more to make than its face value. At approximately 3.7 cents per coin to manufacture and distribute, the humble penny has become a financial burden on the federal government. This cost discrepancy led to significant losses, with government records showing $85 million lost last year alone due to penny production expenses. With zinc prices having more than doubled since 2000, the financial strain has only increased for the penny, which consists primarily of zinc with a copper overlay.

The final order for penny blanks has been placed, and production will officially cease when these materials run out in early 2026. This marks the end of an era for a coin that has been in circulation since the US Mint’s founding in 1792, when pennies were made of pure copper. By discontinuing the penny, the Treasury Department anticipates saving approximately $56 million annually, a significant reduction in government waste.

Presidential Directive

The move to end penny production comes after direct instructions from President Trump, who has been vocal about the coin’s inefficiency. The Trump administration had previously indicated intentions to halt penny production due to its disproportionate manufacturing costs, finally making the decision official. The President’s directive to the Treasury Secretary leaves little doubt about the administration’s stance on the matter.

President Trump further clarified his position with a direct order: “I have instructed my Secretary of the US Treasury to stop producing new pennies.” This directive brings to fruition considerations that have spanned multiple administrations. Even under Treasury Secretary Jacob Lew in 2015, the government had contemplated ending penny production as costs continued to rise, demonstrating that fiscal concerns about the penny have transcended political parties.

Impact on Americans and Businesses

While production will cease, the approximately 114 billion pennies already in circulation will remain legal tender and continue to be used in commerce. However, as these existing pennies gradually disappear from circulation – with Americans reportedly discarding around $68 million in coins annually – businesses will need to adapt their pricing strategies. Most establishments will likely adjust prices to the nearest five cents, eliminating the need for penny-precise transactions.

Production of new pennies has already been declining in recent years, with 3.2 billion produced in 2024, reflecting diminishing demand. The penny’s phase-out represents a practical response to changing economic realities and modern transaction patterns. As digital payments continue to grow in popularity, the necessity for physical small-denomination coins has steadily decreased across the country.

Historical Legacy

The penny holds a significant place in American history, having been in circulation for more than 230 years. Perhaps most notably, in 1909, Abraham Lincoln became the first real person featured on a US coin when his profile was added to the penny, where it remains today. This historical significance ensures that even as production ends, the penny will retain its place in America’s cultural and financial heritage.

While other countries like Canada have already eliminated their lowest-denomination coins without major disruption, the American penny’s departure marks the end of an era for US currency. Numismatists and collectors may see increased interest in pennies as they transition from everyday currency to historical artifacts, potentially increasing the value of certain years and mint marks as production permanently ceases by early 2026.