Bye-bye Penny: USA stop production of the one-cent coin!

Bye-bye Penny: USA stop production of the one-cent coin!

Tallinn, Estland - The USA officially stopped producing the one-cent coin, known as Penny. After more than 230 years, the last order for Penny blade will be given up this month. From the beginning of 2026, no new pennies will be available on the market, as the tax authority announced on Thursday. This decision is based on the drastically increased production costs, which increased from 1.3 cents to 3.69 cents per coin.

The government expects annual savings of around $ 56 million (49.47 million euros), which result from the hiring of penny production. President Donald Trump had already instructed his finance minister in February 2023 to stop the production of the coin. As part of this change, cash transactions will in future be rounded up to the next five-cent amounts, which could have a significant impact on payment transactions. Around 114 billion pennies are currently in circulation.

a historical step

The penny was first issued in 1793 and has shown the portrait of President Abraham Lincoln since 1909. The abolition of the coin reflects a growing problem that affects not only the USA. The one-cent coin is also criticized in Europe; In particular, countries like Finland have actually pulled out of circulation. Another example is Germany, where the National Cash Forum advocated the next five euro cent for rounding cash payments. This forum was founded in 2024 on the initiative of the Deutsche Bundesbank and combines representatives of the credit industry, retail, consumer protection and the machine operator.

The discussion about the importance and benefits of small amounts in business is further fueled by the current inflation issue. Christine Lagarde, President of the European Central Bank (ECB), presented the challenges of inflation in the euro area in a lecture in November 2022, which for the first time reached double -digit values in October 2022. In Estonia, inflation even increased to up to 25 %, which shows how strongly external shocks, how the war in Ukraine and the energy crisis, the economy and consumer behavior influence.

economic effects

The increasing production costs and the abolition of the penny are part of larger economic trends that can be observed in both the USA and in Europe. The ECB has increased the interest rates by 200 basis points and plans further increases to ensure price stability. Lagarde emphasizes that monetary policy must be consistent and clear in order to take effective measures against inflation.

observations indicate that the upcoming structural changes in the economy could further heat inflation through different factors such as pandemeine -related lockdowns and supply chain bottlenecks. The central banks must make sure that the inflation expectations remain stable in order to avoid a possible wage price spiral.

The decision of the United States to cease penny production is therefore not only a national, but also a global signal for dealing with cash in the future.