America has already minted its last circulating penny. Congress is now deciding what comes next.
Last Friday, the Senate passed the Common Cents Act. The bill would formally end penny production for general circulation. It would create national rules for rounding some cash transactions and allow the Treasury to test a cheaper nickel. Existing pennies remain legal tender.
The House and Senate have each passed separate versions of the Common Cents Act, but the texts differ. Congress must now reconcile them.
On its face, this is a modest efficiency measure. It also marks what decades of inflation have done to American money—and Washington’s accelerating shift from physical cash toward digital finance.
Congress is partly catching up with a decision made by the executive branch. In February 2025, President Donald Trump directed the Treasury secretary to stop producing pennies, citing that each penny cost more than 2 cents to make. Treasury subsequently suspended circulation production.
Announcing the move, Trump called it a “waste.” The U.S. Mint struck its final circulating penny on November 12, 2025, ending a 232-year production run.
The economics are difficult to defend. In 2024 alone, the U.S. Mint lost $85.3 million producing pennies. Treasury projected about $56 million in annual material savings from ending production.
When the House approved its version of the Common Cents Act on July 14, House Republicans celebrated with an Abe Lincoln pun: “It’s time to be honest with Honest Abe: this coin just isn’t making cents.”
Sure, the government should not spend nearly four cents to create a coin worth one cent. But the savings tell only part of the story. What the president and lawmakers have largely avoided is the more uncomfortable question: Why did Honest Abe’s coin become so expensive to make?
The Senate bill does not ban pennies already in circulation. It explicitly states that existing one-cent coins “shall remain legal tender” for debts, taxes, and other obligations.
Instead, the bill creates rules for cash transactions when exact change cannot be provided. A merchant could then round the final amount to the nearest five cents. For example, a $10.02 purchase would become $10.00; a $10.03 purchase would become $10.05; and a $10.07 purchase would fall to $10.05.
There is one notable exception: A transaction totaling only one or two cents could be rounded up to five cents.
Electronic payments are not affected by the rounding rules. The bill specifically exempts electronic fund transfers, checks, gift cards, money orders, and credit cards from the rounding provisions. It also does not require rounding when exact change remains available.
The Senate text acknowledges that the transition may affect certain groups unequally. It directs Treasury to assess the effects of penny shortages and rounding on “low-income communities, older consumers, debanked, unbanked, and underbanked individuals.” Treasury must recommend congressional action if it finds harmful effects. The Federal Reserve Board must then incorporate these assessments into a broader plan for maintaining the coin distribution system.
Those concerns are not theoretical. Cash accounted for 14 percent of consumer payments in 2024.
Demographically, the divide is sharp. Households earning under $25,000 used cash for 24 percent of payments—more than twice the rate among households earning over $100,000. Adults aged 55 and older used cash for 19 percent of payments, nine points more than those aged 25 to 54.
That makes the change more than an accounting exercise. The Americans most dependent on physical money are also the ones most exposed when cash can no longer settle every transaction to the exact cent.
The nickel may be the stranger part of the bill. A five-cent coin is expensive to manufacture: In 2024, the Mint spent 13.8 cents per coin and recorded $17.7 million in losses on that denomination.
The Common Cents Act would let Treasury test a cheaper construction for nickels. The Senate text permits a nickel with a zinc inner layer and a nickel outer layer. This new design must lower costs and minimize disruption to vending machines and other coin equipment.
The bill does not abolish the nickel. In fact, the Senate added safeguards before Treasury could discontinue another circulating coin: Treasury would have to notify congressional banking committees, explain the fiscal and operational case, and provide a phaseout plan that considers consumers and businesses.
Still, the pressure is obvious. Inflation keeps shrinking the purchasing power of small dollar denominations. Production costs keep rising. That makes the economic case against the next coin easier with every passing year.
The timing makes the change more consequential. In September, the Senate is expected to vote on the CLARITY Act, which would create a broader federal framework for digital assets. Congress had already enacted the GENIUS Act, establishing rules for payment stablecoins.
There is no statutory link between these measures and the Common Cents Act. But the direction deserves attention.
Cash fell from 31 percent of consumer payments in 2016 to 14 percent in 2024, displaced largely by cards, mobile payments, and online commerce. Now the smallest coin is disappearing from production.
But the penny itself—or any other coin or bill—is not the problem. Uncontrolled money printing is. When the supply of money grows faster than the economy that supports it, each dollar (or coin) buys less, and prices rise.
That erosion occurred alongside decades of deficit spending. Federal debt now stands at nearly $40 trillion. And while debt alone does not determine the dollar’s purchasing power, its scale illustrates the broader fiscal expansion surrounding the currency.
Ancient Rome offers an imperfect but useful comparison. Roman governments debased coins by reducing their precious-metal content. America does not do that literally. It debases purchasing power through inflation instead.
Washington is eliminating a monetary unit that decades of inflation, fueled by disastrous policies under both major parties, have rendered uneconomical.