Will Dropping Pennies Affect You? What the U.S. Decision Means for Canadians

Editor’s Note: The article has been updated to incorporate statements from Senator Lee and Senator Merkley.

(NEXSTAR) — Get ready to hold onto your wallets: The United States could soon phase out pennies. Reports suggest that the U.S. Treasury plans to halt the production of new one-cent coins by early next year.

The Wall Street Journal

mentioned on Thursday, potentially altering how you make payments.

This month, as reported by the Wall Street Journal, the Treasury placed its last order for penny blanks, according to a statement from their spokesperson. This indicates that the Mint will continue producing pennies solely with the remaining stock of blanks. Once these run out, the discontinuation of the penny will force businesses to adjust prices either upwards or downwards to the closest nickel increment, the spokesperson noted to the WSJ.

The Treasury and the U.S. Mint, tasked with manufacturing the country’s currency coins, did not promptly reply to Nexstar’s inquiries for comments.

The report released on Thursday came several months following the Department of Government Efficiency (DOGE).

aim for the penny

and President

Donald Trump

reached out to the Treasury Department for assistance

cease producing additional one-cent coins

, calling them “wasteful.”

The cost to produce a single penny is approximately 3.69 cents, according to recent figures from the U.S. Mint. This marks the 19th continuous year that manufacturing a penny has exceeded one cent in expenses.

and the nickel

“stayed above the nominal value” when it concerns production expenses.

I’m glad to see the Treasury Department adopting ideas from my ‘Make Sense, Not Cents Act,'” Senator Lee stated in remarks provided to Nexstar. “Since each penny costs four cents to produce, eliminating this wasteful practice will save U.S. taxpayers more than $85 million annually.

Stopping the production of pennies is the correct decision, yet we must ensure we execute it properly,” stated Senator Merkley. “Should President Trump be committed to halting this inefficient expenditure—given that producing one penny costs four times more than its face value—he ought to collaborate with Congress to pass essential legislation such as our bipartisan bill co-sponsored with Senator Mike Lee. The moment has come for us to act sensibly rather than merely focusing on cents.

According to the Constitution, Congress has the duty of managing the Federal Reserve and supervising our currency.

The U.S. wouldn’t be the first country to ditch its lowest-denomination coin. (It wouldn’t even be the first time we’ve

stopped producing a coin

.)

What occurred after Canada eliminated its one-cent coin?

In the early 2010s, Canada phased out its penny due to the same factors that the U.S. had cited concerning their penny. However, at that time,

It costs Canada 1.6 cents to produce each new penny.

, significantly lower than what the U.S. currently pays, but still sufficient to encourage the government to eliminate the coin.

Alex Reeves, who was at the time the Senior Manager of Communications for the Royal Canadian Mint, collaborated with financial institutions and charitable organizations to start gathering the country’s pennies. This effort basically reversed the usual distribution process.

PBS News reported in 2014

. Previously circulated pennies were surrendered and smelted to retrieve their precious metallic content.

In the absence of a penny, cash transactions have been adjusted. Now, all cash buys are rounded to the closest five cents: so, for example, an item costing $19.82 would be priced at $19.80, whereas something priced at $19.83 would round up to $19.85. However, payments made via check, debit card, or credit card remain unchanged and are not subject to rounding.

A Treasury spokesperson told the Wall Street Journal that the U.S. seems poised to follow suit.

Could pennies turn into sought-after collectibles?

A decade following Canada’s cessation of pennies, collectors noted that their appeal didn’t dramatically increase. Todd Sandham, who owns a coin and jewelry store in Ontario, shared this insight with a Canadian publication.

CTV News

In 2023, even someone who sold a jar of pennies would “receive approximately one cent and a half.”

Experts at

All About Coins

Recently, someone from Salt Lake City informed Nexstar’s KTVX that they do not anticipate an increase in the worth of Abraham Lincoln’s coin.

I don’t believe we’ll ever witness a time when a 2024 penny will significantly increase in value,” store clerk Casey Hackford-Peer stated. “Perhaps in 200 or 300 years, but certainly not during my lifetime.

What are the outcomes of discontinuing one-cent coins?

Apart from rounding cash transactions, supporters of retaining the one-cent coin argue that eliminating the penny could lead to further repercussions.

The first consideration is functionality. Even though you’re probably handling cash less frequently these days, when you do use it, you anticipate receiving precise change. If we didn’t have pennies, for instance, giving back your due change on a $19.87 item paid with a $20 bill could become complicated.

This might also affect individuals who prefer using cash and coins over credit or debit cards. Eliminating the penny could potentially become more expensive in certain ways as well.

In a

2022 report

From the Federal Reserve, officials cautioned that “sharply decreasing or discontinuing penny manufacturing” might result in a “substantial return of coins from consumers and businesses looking to exchange their pennies.” Nonetheless, the report also indicated that cutting back on penny production could potentially save the Mint as much as $100 million each year.

What about nickels?

Although the U.S. is effectively “losing” money on pennies, the difference between the cost of producing nickels and their face value is significantly more pronounced.

As per the U.S. Mint, manufacturing nickels has consistently exceeded their face value for almost two decades now. During fiscal year 2024, the production cost of this five-cent coin reached approximately 14 cents.

For the other denominations — such as the dime, quarter, and half-dollar — the circumstances are far more favorable.

According to the most recent U.S. Mint report, producing a dime ($0.10) requires only slightly more than five cents ($0.0576). The cost rises to roughly 15 cents ($0.1468) when minting a quarter, and it takes almost 34 cents ($0.3397) to create a half-dollar coin.