Actually doing it would be a very new thing, and could be inflationary (since the US doesn't have a 2c coin). Imagine prices and change being rounded (up) to the nearest nickel. [0] says Trump doesn't have the legal authority to order the Treasury to do this, that power rests with Congress. I can't see that happening when inflation is already a big issue. (Euro 1-cent and 2-cent coins are made of copper-covered steel, so I don't even see any necessity for Trump's decision.)
- If this actually happened it could be worse than the (temporary) inflation caused in Europe when the Euro was adopted at the start of 1999; due to the exchange rate, merchants in Germany and Greece rounded up prices. But this would be worse, the Euro had 1-cent and 2-cent coins, whereas the US would be moving the lowest-denomination from 1c to 5c. Canada abolished its 1p coin in 2012. Mexico's lowest-denomination coin today is 50 centavos (~ USD $0.024) [1]
- Also, phasing out the penny could result in needing to make more nickels, and the US Treasury Department loses far more money on every nickel than it does on every penny: each nickel costs 13.8 cents (11c production costs + 2.8c of administrative and distribution costs). [2] And nickels are heavy and bulky to carry compared to dimes. So imagine if the lowest-denomination coin people moved to using was 10c. Ya think that wouldn't be inflationary?? (Or moving to electronic ap-based payment for everything like in China, which US consumers are resistant to.)
- If this actually happened it could be worse than the (temporary) inflation caused in Europe when the Euro was adopted at the start of 1999; due to the exchange rate, merchants in Germany and Greece rounded up prices. But this would be worse, the Euro had 1-cent and 2-cent coins, whereas the US would be moving the lowest-denomination from 1c to 5c. Canada abolished its 1p coin in 2012. Mexico's lowest-denomination coin today is 50 centavos (~ USD $0.024) [1]
- Also, phasing out the penny could result in needing to make more nickels, and the US Treasury Department loses far more money on every nickel than it does on every penny: each nickel costs 13.8 cents (11c production costs + 2.8c of administrative and distribution costs). [2] And nickels are heavy and bulky to carry compared to dimes. So imagine if the lowest-denomination coin people moved to using was 10c. Ya think that wouldn't be inflationary?? (Or moving to electronic ap-based payment for everything like in China, which US consumers are resistant to.)
[0]: https://www.usnews.com/news/national-news/articles/2025-02-1...
[1]: https://en.wikipedia.org/wiki/Withdrawal_of_low-denomination...
[2]: https://www.cnn.com/2025/02/10/business/costs-of-pennies-and...