The Senate has taken a major step toward overhauling the smallest denominations of U.S. currency, passing legislation that would formally end penny production and pave the way for a redesigned nickel. The Common Cents Act, which cleared the Senate by unanimous consent on Friday, now heads to the House, where a similar version has already passed.
The bill addresses long-standing inefficiencies in coin production, particularly the fact that both the penny and the nickel cost more to mint than their face value. In fiscal year 2025, producing a single nickel cost 13.31 cents, down slightly from 13.78 cents the previous year, marking the 20th consecutive year the nickel has been minted at a loss. The penny has been even more problematic, with production costs exceeding its value for years, prompting the U.S. Mint to stop producing new pennies for circulation last year, though collectible versions were released for the nation's 250th anniversary.
Under the Common Cents Act, the Treasury would be empowered to test a new composition for the five-cent coin, specifically a blend of zinc and nickel. This change is contingent on testing that demonstrates cost savings and minimal disruption to coin-operated machines. Currently, nickels are about 75% copper, and the high price of copper has been a major driver of production costs. The bill's language calls for a "composition of zinc and nickel" that must pass evaluation for both cost-effectiveness and compatibility with existing coin acceptance technology.
The legislation also tackles the practical difficulties of cash transactions in a post-penny world. It would allow businesses to round cash purchases to the nearest nickel, ending the confusion caused by the lack of pennies. For example, a $19.82 purchase would round down to $19.80, while $19.83 would round up to $19.85. Some states and localities currently prohibit such rounding, and the bill aims to create a uniform standard nationwide.
Pennies already in circulation would remain legal tender, and the Federal Reserve would be required to manage the supply to avoid disruptions. An estimated 300 billion pennies are still in circulation, roughly 800 per American, many of them sitting idle in jars, drawers, and other hiding spots.
The push to eliminate the penny has been a long-running bipartisan effort, with proponents arguing that the coin has outlived its usefulness and costs taxpayers millions each year. The nickel, while not being eliminated outright, could see a significant change in its metallic composition, which would reduce production costs and potentially extend its viability.
Efforts to redesign the penny have historically failed, with steel, plastics, and polymers all considered but rejected due to cost or incompatibility with coin-counting machines. The current bill's approach to the nickel, however, appears more feasible, given the availability and lower cost of zinc compared to copper.
For now, the nickel remains unchanged and legal tender, though a separate bill to eliminate it entirely is still pending in a House committee. The Common Cents Act represents a significant step in modernizing U.S. currency, and its passage would mark the first major change to coinage in decades.
As the legislation moves forward, it joins a broader congressional agenda that includes sanctions on Russia and Iran and a potential permanent shift to daylight saving time. The outcome of the Common Cents Act will be closely watched by economists, retailers, and consumers alike, as it could alter the way Americans handle cash for years to come.
