Jul 18, 2026
The penny is already disappearing from circulation. Now, Congress is trying to decide what comes next.
On July 14, the House of Representatives passed the Common Cents Act, legislation that would establish nationwide rules for handling cash purchases as the United States phases out the one-cent coin. The bill now heads to the Senate, where its future remains uncertain.
Advertisement
The legislation comes months after the U.S. Mint produced its final penny in late 2025. According to the U.S. Mint, it costs nearly four cents to manufacture a single penny, making it one of the government’s most expensive coins to produce relative to its value.
Thanks for subscribing!
The money news that actually matters.
By signing up, you accept Moneywise Terms of Use, Subscription Agreement, and Privacy Policy.
The new legislation is less about eliminating the penny than creating clear rules for a country that’s already running short on them.
National Restaurant Association Chief Advocacy Officer Sean Kennedy told CBS News that phasing out the penny has been cumbersome for some businesses. He said restaurants and retailers can face legal liability if they cannot provide exact change, even when they round in the customer’s favor.
The National Restaurant Association estimates that inconsistent rounding practices could cost restaurants up to $168 million a year, but says a federal standard would give businesses certainty as pennies become harder to find. The association also reported that about one in four restaurant customers still pays with cash, meaning the issue affects millions of everyday transactions.
How cash payments would change
If the Common Cents Act becomes law, only cash transactions would be rounded. Prices, taxes and electronic payments would still be calculated to the exact cent. The rounding would happen only after the final total is calculated.
Here’s how the proposed system would work:
- Totals ending in 1, 2, 6 or 7 cents would round down to the nearest nickel
- Totals ending in 3, 4, 8 or 9 cents would round up to the nearest nickel
- Totals already ending in 0 or 5 cents would stay the same
Prices themselves would not have to change. A store could still advertise an item for $9.99. Sales tax would still be calculated normally and your receipt would still show the exact total. The only difference would be the amount you hand over or receive in change if you pay with cash.
If you pay with a debit card, credit card, mobile wallet or check, nothing changes. Those payments would continue to be processed to the exact cent.
Existing pennies also wouldn’t suddenly become worthless. The legislation would allow pennies already in circulation to continue being used as legal tender, even though no new ones are being minted.
Must Read
- The ultra-rich use these 5 real estate strategies to build wealth while they sleep — you can start with just $100
- Here’s the average income of Americans by age in 2026. Are you keeping up or falling behind?
- Insurance companies profit most from drivers who auto-renew without shopping around. Comparing 100+ quotes takes 2 minutes and costs nothing
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Other countries have already made the switch
The United States wouldn’t be the first country to stop using its lowest-value coin.
Advertisement
Canada eliminated the penny in 2012 and adopted virtually the same rounding system now proposed in the Common Cents Act. Cash purchases are rounded to the nearest five cents, while debit, credit card and other electronic payments continue to be charged to the exact cent. Pennies remain legal tender and can still be spent or deposited at banks.
Canada’s government estimated ending penny production would save taxpayers about 11 million Canadian dollars annually, while reducing handling costs for businesses and financial institutions.
Several other countries, including Australia, New Zealand, Sweden and others, have also eliminated their lowest-denomination coins and adopted cash-rounding systems.
Research suggests the impact on consumers is generally small because rounding occurs both up and down over time. The Federal Reserve Bank of St. Louis notes that symmetrical rounding means cash purchases are expected to round down about as often as they round up, limiting the overall effect on what consumers pay.
The Common Cents Act must still clear the Senate before it can become law, and no vote has been scheduled. If senators approve the measure, it would then head to President Trump’s desk for his signature. If signed into law, businesses across the country would have a uniform federal standard for rounding cash transactions as pennies gradually disappear from circulation.
You May Also Like
- JP Morgan sees gold hitting $6,000/oz before 2027 — and a Gold IRA lets you hold the physical metal while deferring the tax bill. Get your free guide from Priority Gold
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and the simple steps to fix it ASAP
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how
- Millionaires under 43 are reshaping investing — just 25% of their portfolios are in stocks. Here’s where their money is going
Clay Halton is an associate editor at Money.ca, covering a wide range of consumer-focused financial stories. He has over eight years of experience in digital publishing and has written and edited for outlets including PCMag and Investopedia.
