Recent legislation passed by the House aims to reshape the future of U.S. currency. The ‘Common Cents Act’ targets three main areas of coin production. It calls for the formal discontinuation of the penny, a practice already implemented, and suggests new methods for managing change without pennies.
Additionally, the bill turns its attention to the nickel, the second-lowest denomination in U.S. currency. With the penny phased out, the nickel seemingly gains significance, especially in cash transactions. Many retailers have adopted rounding practices, ensuring change amounts align with the nearest nickel.
To accommodate the increased use of nickels, the United States Mint has commenced production using equipment adapted for new compositions. Despite these changes, nickels are costly to produce, with expenses exceeding their face value. In the fiscal year 2025, producing a nickel cost 13.31 cents, slightly less than in 2024.
The Treasury is authorized to test a redesigned nickel under the Common Cents Act, aiming to reduce costs without disrupting vending machine functionality. Currently, a nickel comprises only 25% nickel while the rest is copper. To economize, the bill proposes a composition of zinc and nickel, reflecting the cheaper price of zinc compared to copper.
Efforts by the Treasury Secretary to reduce nickel production costs continue. Historically, attempts to cut costs through altering penny compositions have not succeeded. Cheaper metals like steel and alternatives like plastics have proven impractical.
Nickels and pennies remain unchanged and in circulation as legal tender. A bill to cease production of both coins awaits further action in the House. The Common Cents Act now requires Senate approval and presidential endorsement to become law, making its legislative future uncertain.