Why the U.S. Is Discontinuing the One-Cent Coin

For over 200 years, the humble penny has been a fixture of American commerce. First minted in 1793, the one-cent coin carries a rich history and cultural symbolism. Yet in recent decades, calls to discontinue the penny have grown louder—and for good reason. Rising costs, reduced utility, and economic inefficiency have all contributed to the argument that the U.S. penny’s time is coming to an end.

1. The Cost of Producing Pennies

Ironically, it costs more to make a penny than the coin is actually worth. According to the U.S. Mint, each one-cent coin costs around 2.5 cents to produce when you account for materials, labor, and distribution. That means taxpayers are essentially losing money every time new pennies are minted—totaling tens of millions of dollars wasted each year.

2. Inflation and Reduced Buying Power

When pennies were first introduced, they held real value in everyday transactions. Today, thanks to inflation, a single cent buys virtually nothing on its own. The coin’s diminished purchasing power has made it less useful in circulation, with many people choosing to ignore or discard them entirely.

3. The Inconvenience Factor

Pennies slow down transactions at cash registers and contribute to “coin clutter.” Businesses often round prices to the nearest cent, but handling pennies increases checkout times and adds inefficiency to modern commerce. Many economists argue that eliminating the penny would actually save time and money for both consumers and businesses.

4. What Other Countries Have Done

The U.S. is not alone in this debate. Countries like Canada, Australia, and New Zealand have already discontinued their lowest-denomination coins. Instead of chaos, these transitions were smooth, with prices rounded to the nearest five cents. These examples show that removing the penny is both practical and achievable.

5. What Comes Next for the U.S.?

While no official legislation has passed to end penny production, momentum is building. Many lawmakers and economists support discontinuing the coin, citing long-term cost savings and efficiency. If the penny is phased out, transactions would likely be rounded to the nearest five cents—something that has already proven effective in other nations.

Final Thoughts

The penny is a piece of American history, but its role in modern commerce has faded. Continuing to produce it costs more than the coin is worth, while providing little benefit to consumers or businesses. Whether it happens soon or years from now, the discontinuation of the penny seems inevitable. For collectors, however, pennies—especially rare or error varieties—will always hold a special place in U.S. numismatics.