Penny Production Ends in the U.S.

LUBBOCK, Texas – After 232 years, the U.S. Treasury has decided to halt penny production, minting the final one recently.

Over the last decade, the cost to produce a penny has gone up significantly, rising from 1.42 cents to 3.69 cents. Reducing the number of coins minted is expected to save around $56 million each year.

James Arnold, market president at UMB Bank West Texas, noted that this decision aligns with current trends in payment methods. He pointed out that cash transactions have declined, with nearly 70% of people using electronic payments like credit or debit cards, Venmo, or Cash App. Only about 14% rely on cash these days.

With fewer pennies available, Arnold hopes that people will take those old coins out of jars or bags at home. He mentioned that banks might encourage consumers and businesses to return these coins to circulation, as their numbers will dwindle over time.

Faisal Zeitouni, who owns Worldwide Rare Coins, expressed that pennies hold a significant piece of American history. He reminisced about how pennies evolved, mentioning that during World War II, when copper was scarce, coins were made from steel instead.

While some rare pennies can fetch thousands of dollars, Zeitouni pointed out that most retain only their face value. He added a word of caution regarding information found online about coin collecting, emphasizing that unless a penny is one of the rare exceptions, it’s just worth a penny. He suggested that selling them and trading for silver or gold could be a better hedge against inflation.

Some businesses are already feeling the effects of the penny shortage, choosing to round prices for cash payments. Zeitouni remarked that people generally prefer pennies, yet rounding to the nearest whole number can ease transactions.

Arnold highlighted a potential downside, saying that the Federal Reserve estimates a yearly loss of $6 million for cash-paying consumers due to this revaluation. He believes people will gravitate towards faster, electronic transactions as a result.

Currently, there are roughly 300 billion pennies still in circulation, which remain legal tender. While the penny might no longer be produced, its legacy could endure, perhaps echoed in the well-known saying. Zeitouni reflected, “It’s the end of an era, but everything comes to an end.”