The Penny Isn’t Going Away—But It’s Changing
House-passed legislation would end circulation strikes of the cent while retaining the denomination as a collector coin and legal tender.
It looks like we might finally have an answer regarding the future of our 1-cent “penny.” On July 14, the House of Representatives voted to end production of the denomination once and for all…well, not exactly. House bill HR 3074 (“Common Cents Act”) allows production of the denomination to continue, but only as a collector’s item. This mirrors the end of production of the Trade Dollar; a coin struck for circulation through 1878 but struck in Proof only between 1879 and 1885.
The legislation also imposes a federally mandated rounding rule through which cash purchases would be rounded up or down to the nearest five cents when exact change isn’t available. This is called Swedish Rounding in other countries; it was introduced in Sweden first. Payments made using any non-cash method will continue to be calculated to the exact cent, something of importance especially when calculating sales tax.
Should the bill pass the Senate, in which case it will become law, the so-called penny will remain as legal tender. The bill also addresses our 5-cent “nickel,” the cost of producing this denomination, which is also becoming a sore spot for the US Mint. The legislation authorizes the Treasury to begin minting a less expensive zinc-based coin. According to Rep. French Hill (R-Arkansas), this would “ensure that increased nickel demand is not mitigating the savings due to the elimination of the penny.”
Incidentally, should the House bill become law as written, it would take effect one year after its enactment.
Catch up on more penny ponderings.
