The U.S. Treasury announced on Thursday that it will completely stop issuing penny coins by early 2026. This lowest denomination currency, which has been in circulation for over a century, is set to officially retire. The decision stems from the rising cost of minting and a policy-level reassessment of fiscal expenditure, viewed as a symbolic move by the government to cut "inefficient spending."
Minting Costs Far Exceed Face Value, Losing Tens of Millions Annually
The Treasury Department noted in its announcement that since 2014, the production cost of the penny has continually increased, going from 1.3 cents per coin to the current 3.69 cents. This means that for each coin produced, the government incurs nearly four times the cost in waste. Ceasing production is expected to save the federal budget about $56 million annually.
The plan has received broad bipartisan support and is seen as a model of cross-party financial consensus. The Treasury stated that the last batch of penny coins was ordered in May and will gradually phase out from circulation.
Trump's Stance: High Costs, "Unnecessary Waste"
President Trump signed an executive directive as early as February this year, instructing Treasury Secretary Besent to advance this policy. He openly stated that the existence of the penny is "meaningless" and merely "a waste of taxpayer's money," advocating for the removal of such "symbolic fiscal loopholes" as a priority.
Although the move may affect some who have an emotional attachment to traditional coins, most economists and budget experts express support, believing the current circulation system can fully replace its function through digital payments and rounding mechanisms.
Subsequent Impact and Market Alternatives
The Treasury stated that post-2026, existing pennies in circulation will still hold legal tender status but will not be newly minted. Future cash transactions by retailers and consumers will use the "rounding" mechanism; electronic payments will remain unaffected.
Meanwhile, a temporary market fluctuation is expected among coin collectors and the memorabilia market, with some rare versions from certain years likely to appreciate in value.
Summary:
As the penny gradually exits, the American fiscal system is advancing towards a more efficient and modernized payment structure. Against the backdrop of fiscal savings and policy prudence, this symbolic transformation may only be the beginning of broader currency reform in the future.
