U.S discontinues manufacturing of penny coins due to costs exceeding their worth - U.S. halts manufacturing of one-cent currency pieces
U.S. to Discontinue Production of 1-Cent Coins Amid High Costs
Washington - The United States will cease the production of its 1-cent coin starting early next year, according to several US media outlets. This decision comes after nearly 230 years of circulation, with the Treasury Department and coin producers confirming the measure to reduce costs that exceed the coin's value.
Cost pressures have led businesses to anticipate rounding prices up or down to the nearest 5-cent increment in the future. The move was previously advocated by U.S. President Donald Trump, who cited estimated annual savings of around 56 million USD (approximately 50 million EUR).
A situation similar to the U.S. debate is unfolding in Germany, where ongoing discussions revolve around the potential elimination of 1- and 2-cent coins. The German "National Cash Forum" – an initiative consisting of representatives from retail, banking associations, cash handlers, and consumer protection groups – has been proposing the rounding system due to escalating production costs.
In certain Eurozone countries, rounding systems are already in effect, such as Finland's legal implementation of cash payments rounded to the nearest 5-cent increment. Similar regulations have been put in place in the Netherlands, Slovakia, Ireland, Italy, Belgium, and Estonia, though the smallest cent coins have not been completely abolished yet, as a European-level decision would be required.
Lithuania has recently moved to effectively eliminate the use of 1- and 2-cent coins through rounding rules, sparking debates in other European countries. Meanwhile, Austria is adopting a wait-and-see approach, with the Austrian National Bank predisposed to follow the wishes of retailers and consumers. In summary, while Germany is considering implementing a rounding practice, a definitive action has yet to be taken, with the future of the 1-cent coin in Germany unclear but part of broader discussions within the EU about the utility of these coins.
[1] High production costs of 1- and 2-cent euro coins a concern for many EU countries, ZeroHedge, July 24, 2019.[2] Eurobarometer survey shows majority of eurozone residents favor abolishing 1- and 2-cent coins, EuroNews, August 27, 2019.[3] Germany debates rounding prices to eliminate need for smallest euro coins, Deutsche Welle, March 3, 2020.
- The high production costs associated with 1- and 2-cent euro coins have raised concerns in various European countries, as reflected in discussions similar to those in Germany.
- The escalating costs of producing 1- and 2-cent euro coins have led some European countries, including Austria and Finland, to implement rounding systems in their businesses, while others, like Germany, continue industry and finance discussions about their potential elimination.
