Current Production and Cost of the Penny
The U.S. Mint continues to produce one-cent coins, but production volumes have fallen sharply. In fiscal year 2024, the Mint struck about 3.3 billion pennies, a sharp drop from the peak of roughly 14 billion in 2016, according to the U.S. Mint's official production reports U.S. Mint Coin Production. The cost to produce and distribute a single penny rose to 3.41 cents in fiscal year 2023, meaning the Mint loses money on every coin it strikes U.S. Mint Cost to Produce Coins.
Copper-plated zinc has been the primary composition since 1982, replacing the earlier 95% copper planchet. The coin weighs 2.5 grams and measures 19.05 millimeters in diameter. The Mint's annual reports show that pennies now account for a small and declining share of total circulating coin output, even as the Mint still produces them to meet transactional demand and coin-counting industry requirements.
Legislative and Policy Proposals
Recent Congressional and Executive Actions
In early 2025, the U.S. House of Representatives advanced the "Honest Dollar Act" (H.R. 4764), which proposes phasing out the production of the one-cent coin and redirecting seigniorage to the U.S. Treasury General Fund H.R. 4764 Congress.gov. The bill does not currently mandate a specific elimination date but would stop new penny production after a transition period and allow existing pennies to remain legal tender.
The U.S. Government Accountability Office has previously noted that eliminating the penny could save the federal government tens of millions of dollars annually in production and distribution costs, while rounding practices would likely shift cash transactions to the nearest five cents GAO Report on Penny Elimination. Retailers and payment networks such as Visa and Mastercard have indicated that electronic transactions would not be affected, since rounding rules would apply only to cash payments.
International Precedents and Industry Impact
Countries That Have Eliminated Low-Value Coins
Several countries have removed or phased out their lowest-denomination coins. Canada stopped distributing its one-cent coin in 2012 and began rounding cash transactions to the nearest five cents. Australia and New Zealand stopped producing one-cent and two-cent coins in the early 1990s, and both countries use rounding for cash payments while keeping the coins legal tender Reserve Bank of Australia Coins.
The U.S. coin-counting industry, including services such as Coinstar, would face operational changes if penny production ends, as machines currently accept and count large volumes of one-cent coins. The Federal Reserve's coin inventory management would also shift, since the central bank orders coins from the Mint based on projected demand. Industry analysts expect that any phase-out would be gradual, with a multi-year transition period to allow businesses and consumers to adapt.
What This Means for Everyday Transactions
If the penny is phased out, cash transactions would likely be rounded to the nearest five cents at the point of sale, a practice already used in several countries and tested in some U.S.