No More Pennies in 2026: After more than two centuries of American history, the familiar copper-colored penny is about to become a relic of the past. The U.S. Treasury Department has announced that it will stop manufacturing pennies, placing its last order for penny blanks in May. Those blanks, which are manufactured into pennies, will run out in early 2026, at which point penny production will cease.
This historic decision marks the end of an era for America’s most recognizable coin, which has been a constant companion in wallets, purse corners, and piggy banks since the nation’s founding. But what does this mean for consumers, businesses, and the millions of pennies already in circulation?
The Economics Behind the Decision
Why the Penny Had to Go
According to the United States Mint’s 2024 annual report, it costs 3.7 cents to manufacture a single penny, meaning the country is spending more on producing pennies than the coins are worth. This financial inefficiency has persisted for nearly two decades, with the cost of the coin remaining “above face value for the 19th consecutive fiscal year.”
Last year alone, the penny’s production resulted in a loss of $85 million for the Mint. When President Trump announced the decision in February 2025, he emphasized the wasteful nature of the practice: “For far too long the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful!”
The Numbers Game
Each penny costs nearly four cents to produce, so the move is expected to result in immediate savings of $56 million a year. Over the past decade, production costs have nearly tripled, rising from 1.3 cents per penny to the current 3.7 cents, making the economic case for elimination increasingly compelling.
The situation becomes even more complex when considering that the Mint actually loses even more money on each nickel it produces. Each nickel costs 13.8 cents, with 11 cents of production costs and 2.8 cents of administrative and distribution costs.
What Happens to Existing Pennies?
Legal Tender Status Remains
Pennies will remain legal tender, which is fortunate since more than a billion dollar’s worth are in circulation. This means that all existing pennies will continue to be accepted for transactions, even after production ceases. Consumers with pennies will still be able to use them for purchases.
The Gradual Phase-Out Process
Unlike an immediate recall, the penny’s disappearance from everyday commerce will be gradual. Most are rarely used, however, instead gathering dust in dresser-top coffee cans and forgotten in pants pockets. The existing supply of over 100 billion pennies in circulation means it could take years before they become truly rare in daily transactions.
Impact on Businesses and Consumers
Rounding to the Nearest Nickel
Businesses will have to start rounding their prices up or down to the nearest five cents for cash transactions. This practice, known as “Swedish rounding,” has been successfully implemented in other countries. In countries like Canada, there are different practices when it comes to rounding transactions up or down. Instead of one set rule, some businesses will round down transactions to the nearest nickel, while some round down sales that fall below five cents and round up sales that are more than five cents.
Digital Payments Soften the Blow
The phase-out may require stores to round prices up or down to the nearest nickel, although the growing popularity of non-cash payments makes that less of a headache. Fewer than one in five payments are made with cash, according to the Federal Reserve Bank of Boston.
According to Pew Research Center data, as of 2022, about 41% of Americans said they do not use cash for purchases in a typical week, up from 29% in 2018 and 24% in 2015.
International Precedent and Lessons
Following Global Trends
Australia ended production of its 1 and 2 cent coins in 1992, and Canada followed suit by phasing out its penny in 2012. New Zealand eliminated its 1 and 2 cent coins in 1990 and later discontinued the 5 cent coin in 2006.
These countries have demonstrated that eliminating low-value coins doesn’t significantly disrupt commerce, especially as digital payments become more prevalent. The Canadian experience is particularly relevant, as their penny was similar in size and value to the American version.
What Should You Do with Your Pennies?
For Everyday Consumers
Spend Them Now: Use your pennies in cash transactions while they’re still widely accepted. This helps circulate them back into the economy before they become scarce.
Bank Deposits: Most banks will accept penny deposits, though some may require them to be rolled. Check with your bank about their coin deposit policies.
Coin Counting Machines: Many grocery stores and banks have coin counting machines that can convert your pennies to bills or store credit.
For Collectors and Investors
Historical Significance: Among the most valuable pennies is the Lincoln Wheat penny, which was produced in 1909 and commemorated the 100th anniversary of Abraham Lincoln’s birth, featuring the former president’s profile on one side and two wheat stalks with the words “ONE CENT” and “UNITED STATES OF AMERICA” on the other.
Future Value: As production ends, certain pennies may increase in collector value, particularly those in mint condition or with unique characteristics like the 1943 steel pennies produced during World War II.
The Nickel Question
Will Nickels Be Next?
The discontinuation of pennies would increase the number of nickels, but the five-cent coin has also come under scrutiny. Just like the penny, nickels cost more to produce than they’re worth, and that raw production cost is higher than that of the penny.
Treasury Secretary Scott Bessent told lawmakers that the administration believes it can break even on nickel production by changing the composition of the coins.
The Future of Physical Currency
Taking another coin out of circulation could further complicate transactions for businesses, but it could also spur a movement away from a physical currency altogether.
The penny’s elimination represents more than just a cost-saving measure—it’s a reflection of America’s evolving relationship with physical currency in an increasingly digital economy.
Frequently Asked Questions
Q: When exactly will pennies stop being produced? A: Penny production will end in early 2026 when the final batch of penny blanks ordered in May 2025 is exhausted.
Q: Can I still use my existing pennies after 2026? A: Yes, pennies will remain legal tender and can still be used for purchases indefinitely, even after production stops.
Q: Will prices increase due to rounding? A: Rounding will only affect cash transactions and should average out over time, with some purchases rounded up and others rounded down to the nearest nickel.