After 230 years, penny dies: What pushed the US Mint to pull the plug

The US Mint in Philadelphia produced its last penny on Wednesday, highlighting the ongoing phase-out of the one-cent coins, which were part of American culture for over 230 years but turned nearly worthless, Associated Press reported.

 

The penny was among the first coins produced by the US Mint after it was founded in 1792, when only half-cent and one-cent pieces were being struck.

 

Introduced first in 1793, a penny was enough to buy a biscuit, a candle, or a piece of candy. Today, most pennies are left to gather dust in jars and drawers.

 

What's the latest

 

Before hitting a button to strike the final penny, Treasurer Brandon Beach at the US Mint said, "God bless America, and we’re going to save the taxpayers $56 million."

 

The decision to end the production of pennies was made by US President Donald Trump earlier this year as costs climbed and the one-cent valuation became virtually obsolete.

 

In February, Trump said, "For far too long, the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful. I have instructed my Secretary of the US Treasury to stop producing new pennies."

 

Beach told reporters that they would auction off the final pennies printed in Philadelphia. The last US coin to be discontinued was the half-cent, he added.

 

According to the report, an estimated 250 billion pennies continue to be in circulation and will remain legal tender, but the new ones will not be made. Production of most pennies ended over the summer, officials told Associated Press.

 

Why it matters

 

Despite being greatly underutilised, many Americans have nostalgia, while some of them see them as lucky, others find it fun to collect. Pennies have also been woven into long-standing traditions and even appear in old rhymes, such as “See a penny, pick it up. All day you’ll have good luck.”

 

The penny has also remained useful, not only for charity drives but for people who still rely on physical cash and coins for everyday purchases.

 

In the last few weeks, some retailers voiced concerns after supplies ran low and the end of production drew near. For retailers, the phase-out was abrupt, and in part crucial given that the price ending in $.99, served as a bedrock of American retail, which used to convince customers of it being a good deal, ABC News reported.

 

AP report suggests that while the retailers believed that the phase-out was abrupt, it did not come with any government guidance on how to handle transactions.

 

Previously, some businesses rounded prices down to avoid shortchanging shoppers, while others asked the customers to bring exact change. A few even got creative, offering prizes, like a free drink, in exchange for a stash of pennies.

 

According to the American Bankers Association, some banks and retailers might round cash transactions to the nearest five cents, copying what countries like Canada and Australia did after phasing out their own lowest-value coins.

 

Numbers game

 

The cost to produce a penny is four cents, still cheaper than the nickel, which costs nearly 14 cents to make. By comparison, the much smaller dime costs less than 6 cents, while the quarter comes in at nearly 15 cents.

 

In the financial year 2024, pennies accounted for 57 per cent or 3.2 billion of Mint's total production of 5.61 billion circulating coins

 

What's next?

 

While the details of the auction have not been revealed, the Philadelphia Mint produced a total of 232 Omega-stamped coins for the auction, one for each year the penny was produced, along with three for display at the Treasury and other institutions. The US Mint also produced 235 gold pennies, Reuters reported.

 

US Mint Acting Director Kristie McNally said the first and last coins to be auctioned could each fetch about $100,000. All proceeds will support Mint operations, with any surplus transferred to the US Treasury.

 

Despite their face value, collectors and historians view pennies as an important part of the historical record. Frank Holt, an emeritus professor at the University of Houston who studies the history of coins, laments their demise.

 

"We put mottoes on them and self-identifiers, and we decide — in the case of the United States — which dead persons are most important to us and should be commemorated,” he said. “They reflect our politics, our religion, our art, our sense of ourselves, our ideals, our aspirations", he said.