The penny currently costs about 3.69 cents to produce, according to Treasury and Mint data, nearly four times more than its worth. As part of the phase-out, the Treasury placed its final order for penny blanks earlier in 2025; once that stock is depleted, no new pennies will be produced for circulation.
While production ends, existing pennies remain legal tender. Consumers can continue to use them, and businesses are expected to adapt to cash transactions by rounding purchases to the nearest nickel, according to analysts. A recent report from the Federal Reserve Bank of Richmond suggests that the “rounding tax” could cost cash users around $6 million per year. However, officials describe it as relatively modest in the broader context.
Some worry about the broader implications of removing the penny, especially for low-income communities and charities that rely on coin donations. There is also speculation about the future of the nickel, which is itself expensive to produce.
Beyond economics, there is a cultural weight to the decision. The penny has been part of American life since 1793, and Abraham Lincoln’s image has appeared on it since 1909. Critics argue that modern cash usage and digital payments have rendered the penny obsolete, while defenders claim it played a crucial role in making change accessible.
Treasury officials say they will continue to mint collector pennies for numismatists, but those coins won’t enter general circulation. For everyday Americans, the penny’s retirement marks a practical shift and the end of an era.
