PHILADELPHIA (Reuters) -U.S. Treasury Secretary Scott Bessent and Treasurer Brandon Beach will visit the Philadelphia Mint on Wednesday to oversee production of the final circulating one-cent coin or penny, each of which costs nearly 4 cents to produce, Treasury said.
U.S. President Donald Trump said in February he was ordering Treasury to halt what he called the “wasteful” minting of pennies, prompting gas stations, fast-food chains and big-box stores to adjust prices and round cash transactions.
Treasury said rising production costs and rapidly changing consumer habits and technology had made production of pennies “financially untenable” and unnecessary, noting that it now costs 3.69 cents to make each penny, up from 1.42 cents a decade ago.
Suspending their production is expected to save the U.S. Mint about $56 million a year, Treasury said. Pennies will remain legal tender, with an estimated 300 billion of them in circulation, “far exceeding the amount needed for commerce,” Treasury said.
The U.S. is joining other countries, including Canada, Australia, Ireland and New Zealand, in phasing out their lowest-value coins, rounding cash transactions up or down to the nearest five cents while keeping electronic payments exact.
The penny was first issued by the government in 1793. Since 1909, the profile of President Abraham Lincoln has adorned the obverse side of the coin made of zinc and copper.
In fiscal 2024, pennies accounted for 57% – or 3.2 billion – of the Mint’s total production of 5.61 billion circulating coins. The Mint will continue to produce collector versions of the penny in limited quantities, Treasury said.
Supporters of the penny have argued that it helps keep consumer prices lower and is a source of income to charities.
For many Americans, however, the coin has become a nuisance that ends up being discarded in drawers, jars and piggy banks.
The American Bankers Association said last month a slowdown in production this year had created localized supply issues, especially in areas where terminals used by banks to deposit excess coins have been shut down.
It said the banking industry was encouraging consumers to check their home, car and coin jars for pennies and bring them to banks, retailers or coin kiosks to help ease the slowdown.
A decision on whether to eliminate the penny would be up to Congress and the president, the banking group said, noting the U.S. Constitution gave Congress the authority to coin money.
(Reporting by Andrea Shalal; Editing by Richard Chang)
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