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Last week, the U.S. took another step toward a cashless society:
The U.S. Treasury Department announced that it will stop making new pennies by early 2026.
The decision ultimately stems from the fact that it costs about 3 cents to produce each penny. This move is expected to save $56 million a year.
Businesses will adjust prices in increments of 5 cents, either up or down.
Several countries, including Canada in 2012, have already phased out their lowest-denomination coin without any significant impact on economic activity.
For most people, the removal of the penny won't make a huge difference. Cash payments now account for only 16% of transactions, a number that continues to fall year after year. Many places won't even accept cash anymore. Have you been to a sporting event or concert in the last few years? Card Only.
Simplicity, ease of use, security, portability, and tracking are things that society is telling us matter for both consumers and businesses.
Nickels cost about 10 cents to produce, does that mean they are next to be phased out?
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