The U.S. Treasury will retire the penny by 2026 due to high production costs, as confirmed by President Trump and legislators in Washington, D.C.
This event may increase interest in digital transaction micro-units like Bitcoinโs satoshis, although no official U.S. policy endorses them yet.
U.S. to Retire Penny by 2026
The U.S. is set to retire the penny in 2026 due to rising production costs and declining usage. The announcement by the U.S. Treasury, following directives from President Trump, marks a shift in cash handling policy. As noted by the U.S. Department of Treasury, โThis decision comes after careful consideration of the pennyโs production costs and its declining usage in everyday transactions.โ
The decision involves President Trump and Treasury Secretary Scott Bessent, focusing on halting penny production. The Common Cents Act, sponsored by Representatives McClain and Garcia, guides the transition to rounding transactions to the nearest nickel.
$56 Million Savings per Year with Penny Halt
The cessation of penny production is estimated to save the government $56 million annually. While the primary impact is on cash transactions, digital payment systems remain unchanged, sparking debate about Bitcoinโs micro-paymentsโ role. The CRS Product Analysis on US International Trade provides insights on similar financial measures, accessible here.
Potential outcomes include shifts in cash handling strategies but no direct governmental changes to Bitcoin policy. Historically, similar moves in Canada led to no cryptocurrency adoption in cash markets, indicating certain stability in crypto realms.
Coin Elimination Spanning Over 160 Years
Canadaโs penny phase-out in 2013 saw a shift to rounding, with no direct effect on digital payments. Historically, the U.S. retired the half-cent coin in 1857, indicating long-term monetary restructuring tendencies.
Experts suggest minimal immediate impact on cryptocurrencies like Bitcoin. Kanalcoinโs analysis points to potential growth in digital paymentsโ popularity, yet no regulatory endorsement of Bitcoinโs satoshis for fractional use has been declared.
| Disclaimer: This website provides information only and is not financial advice. Cryptocurrency investments are risky. We do not guarantee accuracy and are not liable for losses. Conduct your own research before investing. |