US ends penny-making run after more than 230 years

The US intends to earn its last penny.

The Philadelphia Mint will strike its final batch of one-cent coins on Wednesday after more than 230 years of production.

The coins will remain in circulation, but their phase-out has already prompted businesses to begin adjusting prices as they say the coins are becoming increasingly difficult to find.

The government says the move will save money, or as President Donald Trump said in February when he first announced the plans: “Take waste out of our great country's budget, even if it's a penny at a time.”

The coins, which honor Civil War President Abraham Lincoln and are made of copper-plated zinc, now cost nearly four cents apiece to make—more than twice as much as a decade ago, according to the Treasury Department. The company estimates that the decision to discontinue production will save about $56 million annually.

Officials say the rise of electronic transactions is making the penny, which was first introduced in 1793, increasingly controversial.

The Treasury Department estimates there will be about 300 billion coins left in circulation, “far in excess of the amount needed for trade.”

Many coins eventually fall out of use. About 60% of all coins in circulation in the United States, or about $60-$90 for a typical household, are kept in piggy banks at home and are considered unprofitable for trading. according to government analysis 2022.

But economists should be careful: As businesses begin to round up prices, the move is expected to raise costs for shoppers. One study by researchers at the Richmond Federal Reserve It is estimated that this could cost consumers $6 million a year.

Other countries have also gradually phased out the lowest value coins. Canada, for example, issued its last batch of one-cent coins in 2012.

Australia and New Zealand phased out one- and two-cent coins in the 1990s, and New Zealand stopped producing five-cent coins in 2006.

The UK put forward a plan to phase out 1p coins in 2018, but the proposal was later withdrawn.

But the rise in electronic transactions prompted Britain to stop producing the coins in 2024 after officials decided there were enough 1p and 2p coins in circulation.

In the US, the focus is now on nickel, which has a nominal value of five cents but costs almost 14 cents to produce.

According to a Richmond Fed study, eliminating the coin would have a much larger impact on consumers and cost consumers about $55 million a year.