The production of nickels cost U.S. taxpayers more than $100 million dollars more than their face value to produce in 2024 alone, a Treasury Department report disclosed to Congress earlier this year. The agency’s finding now places the 5-cent coin past the penny as the Mint’s most expensive “loser,” with unit costs now nearly triple its denomination. In an administration where DOGE-style waste-hunting has become permanent operating procedure across every federal agency, the nickel’s record losses have turned decades-old fiscal drag into a prime target for elimination.
In fiscal year 2024, the Mint spent 13.78 cents to produce and distribute each nickel, up 19.4% from 11.54 cents in 2023. That’s more than double the coin’s 5-cent face value, generating a net loss of over $100 million when scaled across the 1.2 billion nickels minted. The penny, long the poster child for coinage waste, wasn’t far behind at 3.69 cents per unit — a 20.2% jump from 3.07 cents — but its losses totaled a comparatively modest $68 million on 5.6 billion units produced.
The report, mandated under the Coin Modernization, Oversight, and Continuity Act of 2010, marks the seventh biennial assessment of circulating coin costs and alternatives. Released in July 2025, it quietly elevates the nickel as the “higher priority” target for reform, citing its “unsustainable” economics driven by nickel and copper price volatility.
The penny’s trajectory offers a preview of what could await the nickel. President Trump’s February 9 call on the Treasury to cease production, citing “wasteful spending” that topped $179 million in FY 2023 alone, led to regular penny minting wrapping in November 2025, with only ceremonial runs planned going forward. Supplies — an estimated 114 billion coins in circulation — are expected to dwindle gradually, prompting states like Utah to issue voluntary symmetrical rounding guidelines for cash transactions to the nearest nickel.
Federal Reserve terminals in cities including Chicago and Dallas have halted penny orders in some cases, forcing retailers to improvise. “Retailers are already experimenting with a patchwork of rounding approaches at checkouts — from always-down policies at some grocers to symmetric rules elsewhere — creating confusion amid the penny shortages,” Axios reported.
The Common Cents Act (H.R. 3074), reintroduced in April 2025, aims to codify nationwide rounding but languishes in the House with few cosponsors after being placed on the Union Calendar in early September.
Canada’s experience offers a cautionary blueprint. The Royal Canadian Mint halted penny production in May 2012, saving $11 million CAD annually — equivalent to about $28 million USD over the first six years, per Finance Department estimates. By 2022, over 7 billion pennies had been redeemed and melted, with symmetrical rounding applied only to cash totals post-tax. A 2023 Bank of Canada retrospective reported no measurable inflation spike, and public adoption was swift: electronic payments, unaffected by rounding, surged to over 80% of transactions within two years.
However, economist Christina Cheung’s 2018 study on Canada’s penny phase-out identified a $3.27 million CAD annual “rounding tax” on consumers from biased pricing, and warned that without clear guidelines, similar asymmetric rounding could favor stores over shoppers.
In the U.S., with cash comprising just 14% of transactions per 2024 Federal Reserve data, experts predict minimal economic ripple, but add that the move could hurt elderly and low-income people who live largely outside the banking system.
The mounting losses have intensified calls for alternatives beyond simply eliminating physical coins. Proponents of a government-issued central bank digital currency (CBDC), or “digital dollar,” point to potential savings of $200 million yearly in Mint costs, along with streamlined payments and instant stimulus delivery during crises, much like Canada’s Interac e-Transfer system accelerated after its penny phase-out.
But the proposal faces fierce opposition centered on constitutional concerns. The Anti-CBDC Surveillance State Act (H.R. 1919), passed by the House in July 2025, bars the Federal Reserve from issuing a retail CBDC, codifying Trump’s January executive order. Rep. Tom Emmer (R-MN-06) argues it would create “government-controlled programmable money” enabling surveillance, evoking China’s e-CNY, where authorities track and throttle transactions.
“A CBDC could give the federal government the unprecedented ability to surveil Americans’ financial transactions and suppress politically unpopular activity,” Emmer warned on the House floor, arguing it would chill free speech by monitoring donations to political causes or boycotts.
Additionally, legal scholars warn that CBDC data — unbuffered by private banks — might evade Fourth Amendment warrant requirements, granting the government warrantless access to spending patterns and potentially infringing Fifth Amendment due process by freezing assets without recourse. Sen. Mike Lee (R-Utah) echoed this in February, reintroducing the No CBDC Act to “enshrine the ban permanently,” citing risks to “financial privacy and sovereignty.”
Even indirect models raise concerns: The Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), signed by Trump in July, greenlights private dollar-pegged stablecoins but mandates oversight to prevent “backdoor” government control. Critics like Sen. Ted Cruz (R-Texas) call it insufficient, warning that programmable features could still suppress “politically unpopular activity.” A Heritage Foundation-led campaign opposing CBDCs garnered over 120,000 signatures by August, framing it as a “two-tiered surveillance system.”
The Atlantic Council tracks 137 countries exploring CBDCs as of July 2025, but the U.S. stands firm against a state-run version, prioritizing private innovation. “We’re not China,” Treasury Secretary Scott Bessent said in a September hearing.
As one Hill aide told German-owned Politico, “Scrap the nickel and let stablecoins handle the pennies of tomorrow. Anything to stop bleeding cash on copper.”
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Christina Botteri is the Executive Editor of The Tennessee Star and The Star News Network. Follow her on X at @christinakb.
So what is the answer? Stop minting coins entirely. Let’s just round every price up to the next dollar. Heck, just round it up to the next five dollars. That will help inflation won’t it?!!!!
The government should concentrate on real waste and fraud that costs a lot and gives nothing positive in return.
Leave the coinage alone!