Jan. 21, 2026 – The little cent is thwarting even the smallest transactions after the U.S. Mint quit making pennies in July. The penny has become scarce.

In the absence of both pennies and federal guidance, businesses craving compliance have had to make their own rules while they wait for the Treasury Department or Congress to answer their pleas for clarity: What may they do when no one has a penny to spend?

Banks, eager to help their customers, found fewer Federal Reserve locations to order pennies and to deposit them. If a bank can’t put its extra pennies into circulation, fewer pennies will be available.

The first guidance from the Federal Reserve, released Jan. 8, will reopen locations accepting pennies, leaving other questions as yet unresolved.

The Law of Money

The U.S. Constitution in article I, section 8, clause 5 delegates to Congress the power “[t]o coin Money, [and] regulate the value thereof.”

Congress first used this power in the Coinage Act of April 2, 1792, establishing coins from the ten-dollar Eagle to the half cent, specifying their content in gold, silver, or copper.^[1]

Similar specifications appear in 31 U.S.C section 5112. Familiar coins exist only because a statute authorizes denomination, size, and weight.

As true now as in 1792, “United States coins … are legal tender for all debts, public charges, taxes, and dues.”^[2]

Although Congress has passed laws changing or eliminating coinage, in 2011 the Secretary of the Treasury merely ordered the Mint to stop producing dollar coins because of growing inventory.^[3]

The statute authorizing coinage, 31 U.S.C. section 5112(a), says the secretary “may mint and issue the following coins,” but 31 U.S.C. section 5111(a)(1) requires minting only “in amounts the Secretary decides are necessary to meet the needs of the United States.”

On Feb. 9, President Donald Trump announced that he told the Secretary of the Treasury to stop minting pennies.^[4] The last order for penny blanks – the pieces of metal pressed into pennies – went out in May.^[5]

The Philadelphia Mint punched the last pennies on Nov. 12, although those were destined for coin collectors. The last pennies for general circulation came out in July.^[6]

“It is unclear whether Trump had the power to unilaterally eliminate the penny,” Forbes wrote, “since currency specifications, including the size and metal content of coins, are dictated by Congress. …

“It may not matter – it’s unlikely that anyone in Congress will argue to bring it back.”^[7]

Penny Pinching

Since the 1980s, people have suggested dumping the penny. It’s a money loser for the Mint. It costs 3.7 cents to produce a single penny, the Mint said.^[8]

“New Zealand, Australia, the Netherlands, Norway, Finland and Sweden, have made smooth transitions to a penny-free economy,” noted the Canadian government in proposing to end its penny.^[9]

As a part of Economic Action Plan 2012, Canada stopped minting its cent, a coin that can pass as a penny south of the border, that cost 1.6 cents to produce.

The Canadian government instructed that after calculating applicable taxes, “[w]hen pennies are not available, cash transactions should be rounded to the nearest five-cent increment in a fair and transparent manner.”

Non-cash transactions, the Canadian government clarified, “will continue to be settled to the cent.”

The elimination of the penny in the United States has not come with instructions.

Exact Change? Maybe

With at least 250 billion pennies in circulation as estimated by the American Bankers Association (ABA),^[10] or even 114 billion as estimated by the Treasury,^[11] we shouldn’t run out soon, should we?

In October, Kwik Trip, based in La Crosse, highlighted the shortage when it announced it would round down cash purchases to the nearest five cents “until a ‘permanent legislative solution’ is passed.”^[12]

“As stores run out of pennies by location, and since the Government has not provided guidance on how to proceed, all cash purchases at Kwik Trip and Kwik Star locations will be rounded down,” the company announced in a press release.^[13]

Woodman’s Markets grocery stores, based in Janesville, chose a different policy, rounding to the nearest nickel.^[14]

Nine business industry groups, representing grocers, restaurants, and retail and convenience stores, wrote to the applicable U.S. House and Senate committee chairs and ranking members on Sept. 30 in a letter titled “Urgent Needs Relating to Penny Production and Distribution.”

“The Federal Reserve … is reporting that dozens of coin distribution locations have already run out of pennies to distribute to facilitate commerce,” the letter stated.

The groups sought a national law to govern when the total after taxes requires a penny. They proposed a law that authorizes rounding to the nearest nickel.

A national law would preempt the “[a]t least ten states and localities” that prohibit treating cash and credit transactions differently, they said, and ensure compliance with prohibitions against treating differently Supplemental Nutrition Assistance Program (SNAP) transactions.^[15]

The same groups raised concerns about ensuring SNAP compliance in a penniless economy in an Oct. 14 letter to Department of Agriculture Secretary Brooke Rollins.

U.S. House and Senate ranking members of the committees charged with bank oversight asked for immediate guidance from the Treasury, Federal Reserve, and Mint covering those issues in a Dec. 2 letter, asking for a response in time for the Christmas shopping season.

Banks Feel the Pinch

“Pennies are still legal tender,” said Scott M. Birrenkott, Director – Legal for the Wisconsin Bankers Association (WBA), which represents banks operating within the state.

“Similar to a two-dollar bill, a half-dollar coin, a dollar coin … a bank will still accept them,” Birrenkott said.

Some banks have sought out pennies, publicizing “penny drives” for people to bring in their penny jars, Birrenkott said.

The penny shortage “means different things to different people,” Birrenkott explained. Some businesses, and some individuals, transact only in cash.

Banks face opposing problems. They can’t easily obtain orders for pennies, and they can’t easily deposit and return into circulation their extra cents, the national ABA said in an Oct. 17 letter to Jerome Powell, Chairman of the Federal Reserve Board of Governors and to Treasury Secretary Scott Bessent.

Federal Reserve locations without pennies in stock also chose not to accept pennies for deposit. By the ABA’s count on Oct. 17, more than 70 locations out of 165 had done that.

“We understand that locations without pennies will be unable to fulfill orders for the coin,” the ABA said, “but if they do not accept penny deposits, they preclude the opportunity to ever have enough pennies for distribution.”

This problem harms banks and retailers who either have to ship their pennies greater distances for deposit or keep more pennies, which increases security risks, the ABA explained.

“Treasury will be issuing guidance. It’s forthcoming,” Birrenkott said, but until then, the WBA is helping banks explain the issue to their front-line workers so they can answer customer questions.

The only guidance so far said more Federal Reserve locations will accept pennies for deposit, which should increase circulation.

Rounding Up or Down?

An early bill “to provide a method for removing one-cent pieces from cash transactions,” the Price Rounding Act of 1989 (H.R. 3761), focused on the math involved in transactions when pennies were out of circulation. Under the bill, totals would be rounded to the nearest five cents. It never passed.

Four bills in the House and two in the Senate address pennies, beginning with H.R. 1270 on Feb. 12. It calls for ending penny production for 10 years, including a study on the effects to determine whether to end production permanently.

The Currency Optimization, Innovation, and National Savings (COINS) Act of 2025 (H.R. 1401) appeared next, on Feb. 18, calling for a 10-year suspension of minting pennies.

The Make Sense Not Cents Act (S. 1554), introduced on May 1, would end minting one-cent coins, noting “[i]t is the sense of Congress that Congress has the sole authority to coin money and regulate currency.”

The Modernize and Improve our National Tender Act (MINT Act) of 2025 (H.R. 4459) appeared most recently, on July 16, calling for the elimination of the penny.

None of these bills has gotten out of committee.

The Common Cents Act (H.R. 3074 and S. 1525) has progressed the farthest. The House Committee on Financial Services favorably reported an amended version of the bill on Sept. 4. It’s on the U.S. House’s calendar for further consideration.

The ABA supports the bills as “ideal vehicles” for a long-term solution, including a consistent rounding rule, which the ABA recommended “always be made in the customer’s favor.”

As initially introduced on April 29 in both chambers, the bills would end penny production and specify rounding to the nearest nickel, but the House bill as amended in committee Sept. 4 removed the rounding guidance.

Is the Nickel Next?

Nickels cost far more than pennies to produce. Each five-cent piece costs the Mint 13.8 cents.^[16] To save money last year, the Mint slashed its annual nickel production 86%.^[17]

Based on the experience of other countries that dropped the cent, the Mint may need to produce a lot more nickels.^[18]

Both the MINT Act and the current House version of the Common Cents Act allow changing the nickel’s composition to make it more cost-effective to produce.

Under H.R. 1270, nickels would be eliminated for 10 years and the effect studied after three years to determine whether the Mint should stop producing the costly coin.

Another bill, the Coin Metal Modification Authorization and Cost Savings Act of 2025 (H.R. 1278), introduced Feb. 13, creates a process for the Mint to change composition of any coin for cost savings.

Endnotes

[1] Act of April 2, 1792 (Coinage Act), sections 9, 12-13, 1 Stat. 246, 248, 249.

[2] 31 U.S.C. section 5103; Coinage Act, section 16, 1 Stat. 246, 250; see also 31 U.S.C. section 5112(h) (“The coins issued under this title shall be legal tender as provided in section 5103 of this title.”).

[3] Kathleen E. Marchsteiner, Andrew P. Scott, and Jacob R. Straus, Proposed Elimination of the Penny: Frequently Asked Questions, Congress.gov, https://www.congress.gov/crs-product/IN12572 (last visited Jan. 13, 2026).

[4] Rachel Treisman, Are Pennies Worth It? Trump’s Plan to Scrap Them Didn’t Come Out of Nowhere, NPR, 1:17 p.m. ET, Feb. 10, 2025, available at https://www.waer.org/2025-02-10/are-pennies-worth-it-trumps-plan-to-scrap-them-didnt-come-out-of-nowhere (last visited Jan. 13, 2026).

[5] Chris Isidore and Matt Egan, The Treasury Unveils Its Plan to Kill the Penny, CNN, 11:07 a.m. EDT, May 22, 2025, https://www.cnn.com/2025/05/22/business/us-discontinue-penny (last visited Jan. 13, 2026).

[6] Kelly Phillips Erb, What the End of the Penny Means for Consumers, Forbes, 2:58 p.m. EST, Nov. 19, 2025, available at https://www.forbes.com/sites/kellyphillipserb/2025/11/13/what-the-end-of-the-penny-means-for-consumers/ (last visited Jan. 13, 2026).

[7] Id.

[8] U.S. Mint 2024 Annual Report 10, 12, available at https://www.usmint.gov/content/dam/usmint/reports/2024-annual-report.pdf (last visited Jan. 13, 2026).

[9] Economic Action Plan 2012, at 217 (Mar. 29, 2012), available at https://www.budget.canada.ca/2012/plan/pdf/Plan2012-eng.pdf (last visited Jan. 13, 2026).

[10] Kimberlee Kruesi, What to Know as the US Mint in Philadelphia Presses Its Final Penny, Associated Press, 1:01 p.m. CST, Nov. 12, 2025, https://apnews.com/article/penny-mint-philadelphia-coin-cc83ace4be6b684cd6d6ab00796993aa (last visited Jan. 13, 2026).

[11] U.S. Dep’t of the Treasury, Penny Production Cessation FAQs, Dec. 23, 2025, https://home.treasury.gov/news/featured-stories/penny-production-cessation-faqs (last visited, Jan. 13, 2026).

[12] Passing on Pennies: Kwik Trip Plans to Round Down on Cash Transactions, MPR News, 8:58 a.m., Oct. 6, 2025, available at https://www.mprnews.org/story/2025/10/06/kwik-trip-ditches-pennies-rounds-down-cash-transactions (last visited Jan. 13, 2026).

[13] Id.

[14] sam-shilts, Woodman’s Implements Cash Policy Changes As Penny Supply Runs Dry, FOX 47, Madison, 3:10 p.m., Nov. 11, 2025, available at https://fox47.com/news/local/woodmans-implements-cash-policy-changes-as-penny-supply-runs-dry (last visited Jan. 13, 2026).

[15] See also 7 C.F.R. section 278.2(b).

[16] U.S. Mint, supra note 8, at 10, 12.

[17] Isidore and Egan, supra note 5.

[18] Id.