The phasing out is expected to save $56 million annually as each penny costs over 3 cents to make
The US Treasury Department announced yesterday that it will phase out production of the penny, following President Donald Trump’s February order.
He called penny production a waste of taxpayer dollars.
The United States Mint will also end the new circulation of the one-cent coins.
The move is expected to save $56 million annually as each penny costs over 3 cents to make.
With the penny gone, merchants would be expected to round cash purchases to the nearest nickel.
However, each nickel costs 13.8 cents to produce and distribute. The Mint may need to produce more nickels to match demand, potentially erasing savings from scrapping the penny.
The US joins countries like Canada, which dropped its penny in 2013.