Treasury's Final Order Signals End of the Penny

If you've got a jar of pennies tucked away at home, now might be the time to roll them up. The U.S. Mint has officially placed its final order for penny blanks and will stop producing the 1-cent coin once those supplies are gone — a decision officials say will save the government $56 million a year, according to CNN.

President Donald Trump announced back in February that he had instructed the Treasury to end the penny's production, calling it "wasteful" and long overdue. The announcement came with a bit of Trump's signature flair, blaming the coin for literally costing more than it's worth, the Associated Press reported.

Turns out, he wasn't exaggerating — at least not by much. The penny now costs almost 4 cents to make.

Why Kill the Penny Now?

The Treasury made its final order for penny blanks earlier this month, according to a spokesperson, and will only continue minting them until those supplies run out. Once they're gone, new pennies will stop entering circulation, and stores will have to round cash purchases to the nearest nickel.

While this isn't the first time the penny's future has been debated, the math behind the decision is more compelling than ever. Each penny costs more than 3 cents to produce, while each nickel costs a jaw-dropping 13.8 cents — that's 11 cents in materials and 2.8 cents in administrative and distribution costs.

And here's the kicker: if demand for nickels increases to replace the penny, it could wipe out the entire savings from eliminating the 1-cent coin — and then some.

What's Left in Circulation?

According to the Treasury, there are currently around 114 billion pennies in circulation — totaling over $1.14 billion. But most of them aren't actually being used. Many are collecting dust in jars, dropped on sidewalks, or left behind in take-a-penny trays.

Gregory Mankiw, a Harvard economics professor and former economic adviser to President George W. Bush, noted that when people start abandoning a coin at the register, it's probably time to move on.

Not Everyone's Ready to Let Go

While the cost issue seems clear, not everyone's ready to bury the penny just yet.

Mark Weller, executive director of Americans for Common Cents — a group funded in part by the company that supplies penny blanks — has been a longtime advocate for keeping the coin. He said there's been a shift over the past six months suggesting the penny's fate was sealed. But now he's more concerned about what comes next — especially for the nickel.

Weller pointed out that most countries end up producing more of their next-lowest coin when they drop their smallest denomination. In the U.S., that could mean producing 2 million to 2.5 million nickels annually — which would cost tens of millions more than continuing with the penny.

He added, "It's incumbent on Treasury to come up with a cheaper way to make the nickel. Let's make sure we're making our coins as least expensively as possible and maintaining the option to use cash in transactions," the AP reported.

What Congress Has to Say

Technically, the Treasury secretary has the authority to decide how many coins to mint to meet national needs. But Congress sets coin specifications — like size and metal content — and could make this change permanent through legislation.

This year, two bipartisan efforts emerged: the Common Cents Act and the Make Sense Not Cents Act. They both aim to eliminate the penny, reflecting growing momentum in Washington. But if history is any guide, passing such laws won't be easy. Similar proposals have failed in the past.

Boston University professor Jay Zagorsky, who authored "The Power of Cash," agrees that the penny should go. But he warned that without new rules — like rounding prices up — the change could just lead to more demand for nickels, and more money lost, according to the AP.

Retailers React

Retailers are already bracing for changes. The National Association of Convenience Stores has expressed support for phasing out the penny, noting that even trimming a few seconds off every cash transaction could improve service. With cash use already on the decline, some stores may barely feel the shift.

And for the rest of us? You can still spend your pennies. They'll remain legal tender — they just won't be made anymore.

References: Stop making cents: US Mint moves forward with plans to kill the penny | The Treasury unveils its plan to kill the penny