Penny for Your Thoughts? There Are Plenty

Debates surrounding low value coinage – their use, perceived usefulness, seigniorage, and so on – are hardly rare, particularly as countries such as the Bahamas, Estonia, Slovakia, and Lithuania have either previously or plan to introduce cash rounding, effectively dropping the lowest denominated coins regardless of them remaining legal tender.

President Trump’s announcement of a directive to the US Treasury Secretary to cease production of the country’s lowest denomination coin has reignited this debate in the United States, whilst the UK Government has responded by confirming that it does not plan to follow suit for its lowest denominations, the 1 and 2 pence coins. So, does Trump’s newest plan to save cents make sense? 

The penny completes the set 

An obvious argument for the continuation of the penny is its history. What would the US cash system be without the lowest denomination coin completing the set? Although one could argue that production of proof coins would satisfy collector demand whilst raising revenue for the Mint at the same time.