Former President Donald Trump has ordered the U.S. Mint to stop producing pennies, citing their excessive production costs. While a penny costs 3.7 cents to make, the move could create a new financial burden: increased demand for nickels, which cost 13.8 cents each to produce and distribute.
Without pennies, retailers would need more nickels to facilitate small-value transactions, leading to higher costs for the U.S. Treasury Department. The Mint has already reduced nickel production to cut losses, but eliminating pennies could force it to produce up to 2.5 billion nickels annually, significantly increasing expenses.
Despite the financial implications, some argue in favor of phasing out pennies. The National Association of Convenience Stores supports the move, stating that rounding transactions to the nearest nickel speeds up customer service. Other nations, such as Canada, successfully eliminated their pennies in 2013.
However, halting penny circulation would require Congressional approval and a costly government buyback program. Given that many pennies are already out of circulation—stored in jars, drawers, or abandoned—the shift to a nickel-based system may not be as simple or cost-effective as intended.
