The penny’s days are officially numbered. The U.S. Treasury confirmed it’s phasing out the production of one-cent coins and will stop sending new ones into circulation. Once the current inventory of penny blanks runs out, there will be no more fresh pennies. While consumers can still use them, businesses will begin rounding prices to the nearest nickel during cash transactions.
Since it costs more than three cents to produce a single penny, Donald Trump pushed for the move earlier this year, calling the coin a budget waste. However, eliminating the penny could just be one part of a bigger money mess. Nickels are even more expensive, as each one costs 13.8 cents to make. The Mint already cut nickel production by 86% last year to try and stop the bleeding. Still, ditching pennies could force them to make more nickels, canceling out any savings.
Even so, the Treasury estimates saving taxpayers $56 million right off the bat. But experts warn those savings might disappear fast if nickel production ramps up, with potential costs skyrocketing beyond the penny’s price tag.
The government hasn’t announced plans for the nickel yet. But as other countries have shown, dropping the smallest coin usually means producing a whole lot more of the next one up. So this change may cost more than a pretty penny.
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