The Department of Government Efficiency may soon set its sights on the United States currency, possibly looking to eliminate the penny, according to recent social posts.
In a post on X on Tuesday, DOGE wrote that the penny costs more than three pennies to make, resulting in “over $179 million” in taxpayer costs through 2023.
According to a report from the US Mint, pennies have accounted for more than half of the 5.9 billion circulating coin shipments from the Federal Reserve in 2024. The cost of pennies has also risen to 3.69 cents, as the coin has consistently “remained above face value” over the last two decades.
In 2024, roughly 3.23 billion pennies were minted, according to the US Mint, down from the 4.52 billion minted in 2023.
The question of whether or not to continue to produce coins that have become less used in recent years is now on the table, as DOGE is being tasked to look into several aspects of government spending.
But how valid are the department’s concerns about cash?
According to the Federal Reserve’s Diary of Consumer Payments Choice report, cash was the third-most-used payment through 2024, “though its share of all payments declined as the total number of payments increased.”
Still, cash payments among Americans remained stable, with the average person using cash for seven payments per month.
The main demographic using cash was low-income households and individuals aged 55 and older. Cash usage was also driven by in-person shopping.
Still, dropping the creation of the penny wouldn’t be too far-fetched, as other countries have taken similar action in recent years.
Canada stopped creating its pennies in the early 2010s for the same reasons why the US might part ways with it.
As a result of no longer having the penny being circulated, purchases in Canada are rounded to the nearest nickel. For example, if something was $20.02, it would cost $20. Similarly, if something costs $20.03, it would cost $20.05.
The Federal Reserve has also touched on this in recent years, sharing in a 2022 report that “drastically reducing or ending the production of the penny” could result in a “significant flow back of coin from consumers and businesses seeking to turn in their pennies.”
The same report also suggested that reducing the production of the penny could result in $100 million worth of savings for the Mint every year.
Still, deciding to eliminate the penny wouldn’t be as easy as Musk asking President Trump to do so, as the Constitution gives powers to regulate the Federal Reserve to Congress.
While Republicans do have control in Congress, DOGE is already facing legal troubles, as lawsuits have been filed challenging Trump’s ability to create the entity, which is separate from the US government but serves as an auditor.