One cent coins will stop being produced in the US next year, the Treasury Department has confirmed. It marks the phasing out of the coins, commonly known as pennies, which have been in circulation for more than two centuries. President Donald Trump told Treasury Secretary Scott Bessent in February to stop minting the coins,calling them "wasteful". There has been a long debate over the cost and usefulness of pennies in the US. In January, Elon Musk's unofficial Department of Government Efficiency (Doge) drew attention to the cost of minting pennies ina post on X. The penny was one of thefirst coins made by the US Mint, entering circulation in 1793. But over the past 10 years, the cost of producing it has risen from 1.3 cents to 3.69 cents per coin, according to the Treasury. The Mint estimates that stopping production will result in an immediate annual saving of $56m (£42m) in reduced material costs. Critics of the zinc and copper coin say producing it is a waste of money and resources, while those who want to keep it argue it keeps prices lower and boosts fund-raising for charities. The phasing out of the coins will mean businesses will need to round prices up or down,according to the Wall Street Journal (WSJ), who first reported the story. "Confirming the WSJ story, the Treasury has made its final order of penny blanks this month and the United States Mint will continue to manufacture pennies while an inventory of penny blanks exists," a Treasury spokesperson said. Other countries have discontinued similar coins. Canada ditched its one cent coin in 2012, citing the cost of minting it and its falling purchasing power due to higher prices. The declining use of cash meant theUK did not mint any new coins in 2024, after officials decided there were already enough coins in circulation. The UK Treasury has said that 1p or 2p coins are not being scrapped, but with more people living cashless lives, there have been several years when no 2p coins were produced.
US Treasury confirms the end of the penny
TruthLens AI Suggested Headline:
"U.S. Treasury to Halt Production of Pennies Starting Next Year"
Bbc News
8.4
TruthLens AI Summary
The U.S. Treasury Department has announced that the production of one cent coins, commonly known as pennies, will cease next year, marking the end of an era for a currency that has been in circulation for over 200 years. This decision follows President Donald Trump's directive to Treasury Secretary Scott Bessent in February to halt the minting of pennies, which he described as 'wasteful.' There has been ongoing debate regarding the economic viability and practicality of the penny, particularly as the cost of minting these coins has significantly increased from 1.3 cents to 3.69 cents per coin over the past decade. The Treasury estimates that discontinuing the penny will save approximately $56 million annually in production costs. Critics have long argued that the production of pennies is an inefficient use of resources, while supporters contend that they help maintain lower prices and are beneficial for charitable fundraising efforts.
In light of this change, businesses will need to adjust their pricing strategies to round amounts to the nearest five cents, as reported by the Wall Street Journal. A Treasury spokesperson confirmed that the final order of penny blanks has been placed, and production will continue until the existing inventory is depleted. This development aligns with trends in other countries that have phased out similar low-denomination coins. For instance, Canada eliminated its one cent coin in 2012, citing the high cost of minting and the diminishing purchasing power of the coin. Similarly, the United Kingdom has not minted new coins in 2024 due to a decrease in cash transactions, although the UK Treasury has stated that it is not scrapping 1p or 2p coins altogether. As cash use continues to decline, the decision to stop penny production reflects changing economic realities and consumer behaviors in the United States and beyond.
TruthLens AI Analysis
The announcement regarding the discontinuation of the penny in the United States carries significant implications for both the economy and societal perceptions. This decision, confirmed by the Treasury Department, marks the end of a long-standing currency that has been in circulation since 1793. The announcement has sparked varied reactions, raising questions about the economic rationale and the social impact of such a move.
Economic Implications
The most immediate economic consequence of ceasing penny production is the projected annual saving of $56 million in material costs. Critics of the penny have long argued that it is a financial burden due to the rising cost of production, which has more than doubled over the last decade. By eliminating the penny, businesses will need to adjust pricing strategies, leading to potential consumer confusion or dissatisfaction. This rounding of prices could also influence inflationary perceptions, as consumers may feel the impact of price adjustments more acutely without the penny to cushion costs.
Social Perceptions and Reactions
The decision to phase out the penny taps into a broader societal debate about currency relevance in a digital age. While some argue that the penny helps mitigate price increases and supports charitable fundraising, others see it as an obsolete coin that clutters wallets and cash registers. The backing from influential figures like Elon Musk adds a layer of modernity to the discourse, positioning the conversation within a narrative of efficiency versus tradition.
Hidden Agendas and Manipulation
While the article primarily focuses on the economic and social aspects of the penny's discontinuation, it could be interpreted as part of a broader trend towards cashless transactions. This shift may serve to promote digital payment systems, which could benefit certain stakeholders in the financial sector. There is a possibility that the news aims to normalize the idea of losing physical currency, thus paving the way for further digitalization in the economy.
Comparative Context
Other countries, such as Canada and the UK, have already moved away from similar small-denomination coins, suggesting a global trend that the U.S. is now following. The mention of these countries reinforces the idea that this decision is part of a larger, international shift towards more efficient currency systems.
Market Impact
In terms of market dynamics, this news could influence sectors related to cash handling and payment processing. Companies that focus on digital payment solutions may see an uptick in usage and investment as the population adapts to a cashless environment. However, businesses that rely heavily on cash transactions might face challenges during this transition, leading to potential stock volatility.
Community Support
The decision may resonate more with younger, tech-savvy individuals who are already embracing cashless transaction methods. Conversely, older generations or those who value traditional currency may express concern or resistance to this change, indicating a divide in support based on technological comfort levels.
In conclusion, the article presents a significant shift in U.S. currency policy with nuanced implications for various sectors of society and the economy. The reliability of the news appears strong given the official source, yet the potential for manipulation exists in how the information is framed and the broader implications it suggests.