Denver, Colorado, Production of coins at the United States Mint. A bin holds blank shapes that will be turned into pennies. (Photo by: Jim West/UCG/Universal Images Group via Getty Images)
UCG/Universal Images Group via Getty Images
In November, the U.S. Treasury Department announced it had stopped the production of pennies due to cost concerns. As a penny costs nearly four cents to make, the departments wants to save $56 million a year by ceasing penny minting. The fact that an estimated 60% of pennies are not circulating but are rather stashed away in people’s piggy banks, drawers and sofa cracks is another reason cited for pennies being obsolete, as is the rise in card and digital payments. The Treasury estimates that the 180 billion one-cent coins believed to be actually circulating in the United States are enough to meet commerce needs.
Proactive decisions by governments and central banks to do away with their smallest currency denominations are actually quite common around the world, as a map with research by Statista shows. Since 1990, more than 100 countries have made such announcements once or even multiple times. The United States’ decision to stop minting the penny but neither withdraw it as legal tender nor introduce mandatory rounding is a bit less widespread, however.
This chart shows countries/territories by year they withdrew their smallest denomination(s)/introduced mandatory rounding.
Statista
Prominent examples of countries stopping the production and also demonetizing their pennies and other small coins are Australia and New Zealand, which have lived without pennies, 2-cent coins and in the case of the latter nation, 5-cent coins, since the 1990s. Canada made the same decision about its penny in 2013, while the number of EU countries which stopped making and accepting smaller Euro-cent coins has grown to six with the latest additions being Estonia and Lithuania this year. In all of these countries, the lack of pennies and other small coins means that cash transactions, or in some cases, all transactions are being rounded—a practice that experts have said has only minimal impacts on consumer prices and retail revenue.
Outside of Western European and Anglophone nations, coin withdrawals are even more common as these countries have in the past gone through phases of high inflation or even hyperinflation more often, making small denominations obsolete faster. This means that some countries have not only done away with all of their currency subunits (like cents) but have also started to eliminate the smallest denominations of their main currency units. Chile, for example, withdrew all its centavo coins in the 1970 and 1980s and continued to do the same with one, two and five peso denominations in 2017. As 10 Chilean pesos today only equal around $0.01, this ongoing withdrawal coincides with coins falling out of use anyways. Colombia and Costa Rica have been on a similar trajectory, while Hungary had done away with all units and subunits under 5 forint by 2008, which equals a comparable $0.02. Uzbekistan, known for its low-value currency and once home to the world’s lowest-value coin, in 2020 withdrew all subunits and currency units under 1000 sum, which translates to $0.08.
Where No One Is Getting Nickeled and Dimed
Countries with currency subunits now officially classified as purely historical also include Uruguay, Sweden, Pakistan, Norway, North Macedonia and Kazakhstan as well as the Czech Republic, Iceland, Algeria and Serbia. Additional nations have also discontinued subunits as well as smaller units before 1990 or have seen them fall out of use without officially withdrawing them (not included in the map). The United States is now joining a group of countries, also including Italy, Brazil, Vietnam, South Korea, South Africa and Singapore, which have all announced a production stop to small currency units without (yet) mandating rounding or declaring the coins withdrawn, potentially because they believe that current coin supply is sufficient or that use cases have become rare anyways. If coin supply is still ample while use subsides, a type of leave-a-penny, take-a-penny system where people simply leave coins on check-out counters has been documented in places like Russia and Albania. Alternatively, price setting in some countries might adjust organically, with cent values disappearing, prices adjusting to the nearest 5, 20 or 50 increments or informal rounding taking over.
Scandinavian nations have been pioneers in withdrawing smaller coins out of efficiency motives, with Denmark having started the process in 1973 for 1 and 2 øre-subunits and Norway following suit in 1975. But as many nations since 1990 have discontinued subunits like 10, 20 or 50 cents or even axed substantial full currency unit coins, this process was also ongoing—officially or not—due to inflation pressures in several other countries during the 1970 and 1980. When it comes to half pennies, which existed in some currencies even longer ago, withdrawals are documented in the Philippines in 1908, Panama in 1940 and the United Kingdom in 1984.
Charted by Statista