The penny’s been circling the drain for years, but now it’s officially on its last legs. According to the media reports on Tuesday, President Donald Trump has ordered the U.S. Treasury to stop minting pennies, calling it a colossal waste of taxpayer dollars. And honestly? He’s got a point.
Let’s break it down: The U.S. Mint spent a mind-boggling $179 million in 2023 just to crank out 4.5 billion pennies. That’s right—billions of coins nobody wants, clogging up wallets and car cup holders across America. Even worse, each penny costs about 3.7 cents to make, meaning Uncle Sam is bleeding money just to keep these things in circulation.
Is this the end of spare change? How killing the penny could shake up the U.S. economy and pave the way for a cashless future.
Donald Trump’s move isn’t just about loose change—it’s part of a broader push to streamline government spending. The decision came after the Department of Government Efficiency (D.O.G.E.), led by none other than Elon Musk (yes, really), pointed out that ditching the penny could save the U.S. millions annually.
But there’s a bigger question here: Could this be the first step toward a cashless economy? And if so, what does that mean for crypto? Let’s dive in.
How Much Does the Penny Cost America? (Spoiler: Too Much)
To put things into perspective, let’s look at the raw numbers:
| Year | Total Pennies Minted (Billions) | Cost per Penny (Cents) | Total Cost to Mint (Millions) |
|---|---|---|---|
| 2020 | 7.6 | 1.99 | $151.2 |
| 2021 | 7.3 | 2.1 | $153.3 |
| 2022 | 6.4 | 2.72 | $174.1 |
| 2023 | 4.5 | 3.7 | $179.0 |
It’s not just the cost of production. The hidden costs of pennies add up, too:
- Banks and businesses waste millions of hours handling and counting them.
- They slow down transactions at cash registers.
- They clog up circulation since people tend to hoard them instead of spending them.
At this point, the real question is: Why did it take so long to pull the plug?
Does Donald Trump Even Have the Power to Kill the Penny?
Well, yes and no.
The U.S. Constitution gives Congress the final say over the country’s currency. But Donald Trump’s move is a clever workaround. While he can’t unilaterally eliminate the penny, he can order the Treasury Secretary to stop minting them—which he just did.
Robert K. Triest, an economist at Northeastern University, explains:
“Technically, the penny still exists. But without new ones being minted, its presence in the economy will shrink fast.”
In other words, pennies will become rare over time, making way for rounding rules (which we’ll get to in a sec).
Is the Nickel Next? And What About Other Coins?
If you think the penny is bad, wait until you hear about the nickel.
Right now, it costs 14 cents to make a single 5-cent coin—almost triple its face value. That’s worse than the penny! If Donald Trump and Musk’s D.O.G.E. (seriously, that name) are serious about cutting costs, the nickel could be next on the chopping block.
And don’t forget the rest:
- Dimes & Quarters – Still profitable, so they’re safe (for now).
- Half Dollars & Dollar Coins – Rarely used, but still in production.
So, could this be a stepping stone toward a fully digital U.S. economy?
Could This Be a Big Win for Crypto?
Killing off physical money might sound like a win for credit cards and mobile payments, but there’s an elephant in the room: cryptocurrency.
With fewer coins in circulation, Americans will get even more comfortable with digital transactions. That’s huge for Bitcoin, Ethereum, and stablecoins like USDC.
Elon Musk’s D.O.G.E. involvement is also raising eyebrows in the crypto community. Given pro-crypto stance of Donald Trump and Elon Musk, some speculate this could be an early push toward integrating blockchain solutions into government finance.
Could we see a digital dollar (CBDC) replacing small denominations soon? Maybe. The U.S. is already researching a central bank digital currency. This penny-killing move could be the first step in conditioning the public for a cashless future.
How Will Americans Handle Transactions Without Pennies?
Good question. Rounding rules are coming.
- If a purchase total ends in 1, 2, 6, or 7 cents, it rounds down.
- If it ends in 3, 4, 8, or 9 cents, it rounds up.
For card transactions? Nothing changes. You still pay the exact total.
Retailers are already adjusting. Some stores in Canada (which ditched the penny in 2013) round everything to the nearest 5 cents. Americans will likely follow suit.
Final Thoughts: Change is Coming (Pun Intended)
Love it or hate it, the penny is history. And this isn’t just about saving a few bucks—it’s a signal that cash is on its way out. With crypto, digital wallets, and blockchain tech gaining traction, we might be witnessing the beginning of the end for physical money in America under Donald Trump.
The big question is: Will you miss the penny, or is it time to let go?
Frequently Asked Questions (FAQs)
1. Why did Donald Trump order the U.S. to stop minting pennies?
The production cost is too high—each penny costs 3.7 cents to make. The U.S. lost $179 million in 2023 alone minting them.
2. What happens to the pennies I already have?
Nothing—they’re still legal tender. But over time, they’ll become rarer as they stop being minted.
3. Will this affect prices?
Not really. Transactions will be rounded up or down to the nearest 5 cents only for cash purchases. Digital payments won’t change.
4. Is the nickel next?
Possibly! Since it costs 14 cents to produce a nickel, the Donald Trump-led US government might phase it out next.
5. What does this mean for digital payments?
With less cash in circulation, more people will switch to credit cards, digital wallets, and maybe even crypto. Welcome to Donald Trump’s America!
6. Could this lead to a digital dollar (CBDC)?
Maybe. Donald Trump is already exploring a Central Bank Digital Currency (CBDC), and this could be a step in that direction.
7. What role does Elon Musk’s D.O.G.E. play?
Donald Trump and Elon Musk’s Department of Government Efficiency (D.O.G.E.) is behind this push. Given Musk’s pro-crypto stance, some believe a bigger digital finance shift is coming.
Glossary of Terms
- Minting: The process of producing coins.
- Fiat Money: Government-issued currency that’s not backed by a commodity like gold.
- CBDC (Central Bank Digital Currency): A digital version of a country’s fiat currency.
- Stablecoin: A type of cryptocurrency pegged to a stable asset, like the U.S. dollar.
- Digital Wallet: A payment system that stores payment information electronically.
References:
Bitcoin News – news.bitcoin.com
Bitcoin – bitcoin.org/
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