At a glance
• In fiscal year 2024 it cost the U.S. Mint 3.69 cents to make and distribute a one-cent coin; it struck more than three billion of them and lost $85.3 million. In Canada, nearly 1.6 cents went into every penny, and distribution stopped in 2013.
• The European Commission estimated in 2013 that issuing 1- and 2-cent euro coins had cost the eurozone a cumulative €1.4 billion, and Finland and the Netherlands already round cash payments to the nearest five cents. Korea stopped producing and circulating its 1- and 5-won coins about twenty years ago, and a single 10-won coin now costs 40 won to make.
• Countries that drop a coin use the same rule: only the final cash total is rounded to the nearest five, amounts ending in 1, 2, 6, or 7 round down, those ending in 3, 4, 8, or 9 round up, and card and electronic payments are untouched.

1. When a Coin Costs More Than It Is Worth

Coins used to make money for governments. When the face value exceeds the metal and manufacturing cost, the difference, called seigniorage, stays in the treasury. But prices rise and metal prices rise while the face value of the smallest coin stays fixed, and at some point the relationship flips. According to a July 2025 economic brief from the Federal Reserve Bank of Richmond, it cost the U.S. Mint 3.69 cents to produce and distribute a one-cent coin in fiscal year 2024, and minting more than three billion pennies that year produced a seigniorage loss of $85.3 million. It is money that loses money the more of it you make.

The United States is not alone. Announcing the end of penny distribution in 2013, the Government of Canada stated that “nearly 1.6 cents goes into every penny.” In its 2013 report on 1- and 2-cent euro coins, the European Commission wrote that most member states face “acquisition costs exceeding up to four times the face value of the coins,” that the unweighted average acquisition price reported by five member states was around 150 percent of face value and the weighted average close to 300 percent, and that across the euro area the cumulative net cost of issuing these coins, a negative seigniorage, came to €1.4 billion. Korea is no exception: according to a February 2026 report by Chosun Biz, “producing a single 10-won coin now costs 40 won.”

AI-reconstructed conceptual image of a jar of small change accumulating at home
Recreated illustration · Not an actual photograph — a conceptual image of a jar of small change accumulating at home

2. Canada, 2013: Drop the Penny, Keep the Rule

Canada is the textbook case of retiring a smallest coin. In its July 2012 announcement, the Department of Finance gave four reasons: the excessive and rising cost of production relative to face value, the growing accumulation of pennies in Canadian households, environmental considerations, and the significant handling costs the penny imposed on retailers, financial institutions, and the economy. The government stated that “the estimated savings for taxpayers from eliminating the penny is $11 million a year,” and on 4 February 2013 the Royal Canadian Mint ceased distributing pennies to financial institutions.

What matters is the rule adopted alongside the withdrawal. Under the government’s rounding guideline, which applies only to the final total of cash payments, amounts “ending in 1, 2, 6 and 7 cents will be rounded down,” those “ending in 3, 4, 8 and 9 cents will be rounded up,” and those “ending in 0 cents and 5 cents will remain the same.” The rounding applies to the total at the till, not to individual prices, and the government stressed that the phase-out “will have no impact on cheque payments or electronic transactions.” It also noted that “the penny will retain its value indefinitely, and can continue to be used in cash transactions with businesses that choose to accept them.” Elimination did not strip the coin of legal-tender status; it stopped new production and supply.

3. The United States, 2025: The End of Penny Production and the Cost of Rounding

The United States kept its penny for a long time but changed course in 2025. The Richmond Fed brief records that in May 2025 the U.S. Treasury placed its final order for penny blanks, with production expected to cease by early 2026. The same brief notes that the United States would not be the first to drop a smallest coin: it eliminated its own half-cent in 1857, New Zealand withdrew its 1- and 2-cent coins in 1990, Australia did the same in 1992, and Canada stopped penny production in 2012.

The heart of the brief is a calculation of how much rounding costs consumers. The authors estimate that phasing out the penny alone, with cash transactions rounded to the nearest five cents, would cost consumers roughly $6 million a year, and that eliminating both the penny and the nickel, with rounding to the nearest ten cents, could cost up to $56 million a year. Set beside the $85.3 million lost on penny production, the figures show that retiring a coin is a trade-off between government accounts and consumer costs. Rounding is not free, but neither is minting.

AI-reconstructed conceptual image of blank coin planchets moving through a mint before striking
Recreated illustration · Not an actual photograph — a conceptual image of blank coin planchets moving through a mint before striking

4. The Eurozone: One Currency, Many Coin Policies

The euro is one currency, but attitudes to its 1- and 2-cent coins differ by country. The Commission’s 2013 report notes that Finland and the Netherlands are in a different situation from the rest of the euro area: “Shortly after the euro changeover, Finland reduced the issuance of 1 and 2 euro cent coins to residual amounts. The Netherlands followed this approach in September 2004,” and both keep circulation low through rounding rules. “In Finland, rounding rules to the nearest 5 cents are set by law for cash payment, whereas similar rules are implemented in the Netherlands since September 2004 on the basis of an agreement between the retail sector and consumer associations.”

The report set out four scenarios for the euro area as a whole: continue issuing as now; continue issuing at lower cost; a “quick withdrawal,” in which issuance stops, coins are collected through retailers and banks within a short period, and binding rounding rules apply; and a “fading out” scenario in which issuance stops and rounding rules apply but the coins remain legal tender and gradually vanish because of their high loss rate. The Commission also recorded that Eurobarometer surveys found citizens generally satisfied with the current coin denominations, acknowledging that the question is not purely one of accounting but also of consumer sentiment and inflation perceptions. It is one of the reasons often cited for the euro area’s failure to reach a common decision since.

5. Korea: The Quiet Exit of the 1- and 5-Won Coins and the 10-Won Dilemma

Korea’s smallest coins disappeared without a formal announcement. According to the National Institute of Korean History, the Bank of Korea put 10-, 5-, and 1-won coins made by the Korea Minting and Security Printing Corporation into circulation from 1966, achieving domestic coin production, and then established its coin system by first striking the 100-won coin in 1970 and issuing the 50-won coin in 1972. Forty years later the picture had changed. The Bank of Korea’s currency chronology records that in December 2006 a smaller new 10-won coin was issued in copper-clad aluminium, a change made to cut material costs.

A February 2026 report by Chosun Biz describes what followed. “It has been twenty years since production and circulation of the 1-won and 5-won coins were halted entirely,” a single 10-won coin now costs 40 won to produce, and a survey found that 89.7 percent of 10-won coins and 89.6 percent of 50-won coins are left idle at home. The Bank of Korea “placed no new orders for coins for circulation last year,” yet says it “has no plan to abolish coin issuance itself.” Rather than fixing a date as Canada did, Korea has stopped striking new coins and let payments migrate to cards and apps while existing coins circulate. Their legal-tender status is unchanged, so the 1-won and 5-won coins are still money, but you will almost never see them at a till.

AI-reconstructed conceptual image of cash change being handed over at a shop counter
Recreated illustration · Not an actual photograph — a conceptual image of cash change being handed over at a shop counter

6. Who Gains From Rounding?

The most common worry about dropping a coin is that shops will always round up and consumers will lose. The symmetric rounding chosen by Canada and Finland is the institutional answer. Because endings of 1, 2, 6, and 7 round down while 3, 4, 8, and 9 round up, the two directions are designed to cancel out over many transactions. It also matters that rounding applies only to the total and not to card payments. As is commonly argued, rounding individual prices would leave room for shops to adjust price tags to their advantage, while rounding only the final total leaves less.

Still, the cost does not vanish entirely. The Richmond Fed estimated the consumer cost of dropping the U.S. penny at about $6 million a year, and the Commission recorded the concern that rounding could affect inflation expectations if it touched frequently bought items typically paid for in cash. Retiring the smallest coin is not a costless policy; it is a choice between the certain loss of continuing to mint and the small uncertainty that rounding creates.

7. Three Things to Remember About Small Change

First, distinguish “abolition” from “end of production.” Canada’s penny and Korea’s 1- and 5-won coins remain legal tender. What ended was new striking and supply through banks, not their status as money.

Second, check the scope of the rounding rule. Wherever you go, the standard is that rounding applies only to the final cash total and never to card, transfer, or cheque payments. If individual prices on a receipt are rounded, that is the shop’s choice, not the system.

Third, remember numbers together with their fiscal year and data year. The American 3.69 cents is fiscal 2024, Canada’s 1.6 cents is 2013, the eurozone’s €1.4 billion is a 2013 report, and Korea’s 40 won is from early 2026. When metal prices move, these numbers move too, which is why the fate of the smallest coin is never settled once but recalculated again and again.

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