The U.S Is Phasing Out Pennies: What Happens Now
Published: May 26th, 2025.
After more than two centuries of jingling in pockets, hiding in couch cushions, and collecting dust in jars, the American penny is finally being retired, at least in production. The U.S. Treasury Department announced that it will begin winding down the minting of the one-cent coin in early 2026, officially ending a tradition that started in 1792.
But while the penny’s days at the Mint are numbered, the coin itself isn’t going away yet. There are still an estimated 114 billion pennies in circulation, which will continue to be used for the foreseeable future.
So what happens next?
It’s not a sudden goodbye
If you're imagining a world where all pennies vanish at once, think again. The transition will be gradual. The Treasury has confirmed that the Mint will continue manufacturing pennies “while an inventory of penny blanks exists.” No hard date has been given for when those blanks will run out, but no more pennies will be made once they do.
Even so, existing pennies will remain legal tender. Stores, banks, and consumers can continue using them in transactions as they do today.
“If we look at the experience in Canada, for the first year after they stopped making pennies, there’s really no change in transactions,” said Jeff Lenard, spokesperson for the National Association of Convenience Stores. That’s based on real-world data: Canada eliminated its penny in 2012 with minimal disruption.
U.S. cash transactions will eventually be rounded to the nearest nickel once retailers start running out of penny rolls. However, this isn’t being dictated by government mandate. “The decision when to do that will rest with each retailer, not official government policy,” Lenard added.
Digital payments—credit, debit, and mobile—will still be calculated to the exact cent, so most shoppers will not notice any difference.
Why now?
The short answer: the penny is expensive. It cost 3.7 cents to produce a single penny in 2024, and the Mint made 3.2 billion. That adds up to tens of millions of taxpayer dollars lost to a coin few people use. Many pennies end up in jars, junk drawers, or are simply abandoned.
“For far too long, the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful!” former President Donald Trump wrote earlier this year on Truth Social. “I have instructed my Secretary of the US Treasury to stop producing new pennies.”
Trump’s directive accelerated a debate that’s been quietly unfolding for years. Economists have long argued that the penny’s utility no longer justifies its cost, especially in an increasingly cashless society.
What you should do with your pennies
Don’t toss them—at least not yet. They still spend just fine. And if you’ve got a jar or two sitting around, it might be time to cash in. According to Coinstar, the average household holds $60 to $90 in loose change, and the average coin jar is worth about $58.
You can convert coins at your bank (though some may require you to roll them yourself) or at kiosks like Coinstar. Often, fees are waived if you opt for store credit instead of cash.
Collectors hoping for a million-dollar penny might want to temper their expectations. While rare coins like the 1943 copper Lincoln cent can fetch six figures, most wheat pennies or old Lincoln cents are worth only a few cents more than face value.
Once pennies stop circulating, nickels will become the smallest denomination in use, though they, too, cost more to produce than they're worth. Some experts worry that the move could backfire economically, while others see it as a long-overdue simplification of the currency system.
For now, though, the penny remains a fixture of American life. Despite fading from the factory line, it plays a significant role in our wallets, at least for a while longer.