The End of the Penny: What the U.S. Treasury’s Decision Means for Consumers and Businesses

A Historic Change in U.S. Currency

For more than 100 years, the penny has been a familiar part of American life. But in 2025, the U.S. Department of the Treasury officially ended production of the one-cent coin, citing cost and practicality concerns.

Although pennies remain legal tender, banks can no longer order new ones from the Federal Reserve. This means that over time, pennies will become less common in circulation.

Why Stop Making Pennies?

The decision comes down to cost and efficiency. Each penny costs more than three cents to produce, meaning taxpayers have been paying millions of dollars each year just to mint coins worth less than their production cost.

As inflation continues to reduce the penny’s purchasing power, the U.S. Mint determined that continuing production no longer makes financial sense.

What Happens to Existing Pennies?

You can still use pennies in everyday transactions, and retailers can still accept them indefinitely. However, because banks are no longer able to order new supplies, once our existing stock runs out, pennies will slowly become harder to find in circulation.

At First State Bank, we will continue providing pennies while our current supply lasts. Business clients may request penny rolls in limited weekly quantities.

How Cash Rounding May Affect Your Purchases

The end of penny production means that cash totals (not card or electronic payments) may be rounded to the nearest five cents when the final amount includes odd cents.

Here’s how it works:

• Rounding only applies to cash transactions.
• Totals ending in 1¢–2¢ are rounded down to the nearest 0 or 5.
• Totals ending in 3¢–4¢ are rounded up to the nearest 5.
• Electronic payments (debit, credit, mobile, online) are not affected—they remain exact to the cent.

For example:

• If your cash total is $10.02, you’ll pay $10.00.
• If it’s $10.03, you’ll pay $10.05.
• Over time, the rounding averages out—so consumers neither lose nor gain in any significant way.

Tips for Businesses

If your business handles cash transactions, consider the following:

• Adjust pricing and POS systems to accommodate rounding.
• Communicate clearly with customers about the change.
• Encourage card or digital payments to reduce coin dependency.
• Review cash-handling policies to manage remaining coin inventory.

Our Ongoing Commitment

Change like this can raise questions, but we’re here to help.

 At First State Bank, we’ll continue monitoring updates from the Federal Reserve and U.S. Treasury and will share guidance as it becomes available.

Our goal remains simple: to help our customers and local businesses navigate every transition with confidence and clarity.