[Alpha Biz= Paul Lee] The U.S. Treasury Department will cease the production and circulation of the one-cent coin (penny) by early next year, following an order from former President Donald Trump to halt minting due to high manufacturing costs, The Wall Street Journal reported on May 22 (local time).
The penny, in circulation for over 200 years, will be gradually withdrawn. The decision stems from the fact that producing a single penny costs approximately 3.7 cents—significantly more than its face value.
According to the Treasury, once current inventories of blank coin templates are exhausted, the U.S. Mint will stop penny production. The last order for blank coins has already been placed this month.
The government expects to save around $56 million annually in material costs by discontinuing the penny. In addition, declining usage has played a role in the decision. The Federal Reserve estimates that roughly 60% of all coins in circulation—valued at up to $14 billion—are stored in jars or containers rather than being actively used. Furthermore, $68 million worth of coins are reportedly discarded each year in the U.S.
The Treasury anticipates that as pennies disappear from the market, businesses may begin rounding prices to the nearest five cents—either up or down—based on availability.
While Congress holds authority over currency production and monetary policy, the Treasury told WSJ that it believes it has the authority to suspend new minting without additional legislative action.
AlphaBIZ Paul Lee(hoondork1977@alphabiz.co.kr)
