Currently, the cost of making one coin is around 3.7 cents (Rs 3.08), which is almost four times its face value of 1 cent. The journey of America’s smallest value coin ‘Penny’ (1 cent) is now coming to an end. The US Treasury Department has announced that the production of new penny coins will be stopped from the beginning of 2026. This decision has come at a time when the government has started considering the coin useless due to its high manufacturing cost and limited utility. This historic decision will save about Rs 477 crore (56 million dollars) every year.
Why was this decision taken?
Currently, the cost of making a penny coin is about 3.7 cents (Rs 3.08), which is almost four times its face value of 1 cent. In the year 2024, the US Mint made about 3.17 billion penny coins, which cost the government $ 85 million (more than Rs 710 crore). In view of this cost and decline in usage, the government has decided to stop its production from 2026.
What will happen to the existing coins?
New penny coins will not be made, but the coins currently in circulation will continue to be valid currency. The government has clarified that citizens will be able to use the coins they have as before. Currently, there are about 114 billion penny coins in circulation in the US, which will continue to be used in the near future.
impact on cash transactions
The discontinuation of the production of the penny may have a slight impact on cash transactions. The transaction amount will now probably be rounded to the nearest 5 cents. For example, if the price of an item is $1.02, it can be rounded to $1 or $1.05. A similar system has already been adopted in countries like Canada and Australia. However, this will not have any impact on digital payments, as transactions there are done in exact amounts.
It also has deep cultural significance
The penny was not just a small coin, it has also been a symbol of American history and culture. It was first issued in 1793 and since 1909 it has been bearing the portrait of Abraham Lincoln, the 16th President of the United States. The penny has long been a part of American pockets and hearts, even if today its purchasing power has diminished to almost nothing.