U.S. Pennies to Discontinue Production, German One- and Two-Cent Coins Remain
Potential Elimination of One-Cent Coins in Germany Discussed? - Contemplating the Elimination of the Penny: Is It Time?
The United States has announced its decision to halt the production of penny coins, with the Treasury Department and coin producers citing high production costs that surpass the coins' value. The last penny production order has been placed, and no new pennies will be minted starting from next year.
Meanwhile, in Germany, a proposal to phase out the use of one- and two-cent coins remains under debate. The "National Cash Forum" initiated by the German Federal Bank suggested rounding cash payments to the nearest five-cent increment, making transactions smoother and expediting checkout processes.
However, unlike the U.S., Germany does not appear to be on the brink of discontinuing its smallest coin denominations. The European Central Bank (ECB) is currently focusing on digital payments and the introduction of a digital euro, but there's no indication that physical one- and two-cent coins will be discontinued in the near future.
The high cost of producing American pennies relative to their value has been a significant factor in the U.S. decision. Annually, around 56 million dollars (approximately 50 million euros) could be saved by discontinuing the penny, according to a forecast by the coin producer. In Germany, small coins are often seen as an annoyance, with many consumers welcoming the prospect of ending the use of the smallest copper coins, particularly when their wallets are heavy with change.
Retailers, however, argue that odd amounts are essential for price differentiation in competition for customers. Consumers typically focus on the number before the decimal point when shopping, considering products to be cheaper than they actually are when priced in odd amounts.
Despite some opposition from cash enthusiasts, the disappearance of small coins in countries like Finland, where rounding rules exist, has not signaled the end of cash. A decision to scrap small Euro coins can only be made at the European level.
- United States
- Germany
- United States Treasury
- German Federal Bank
- Frankfurt
- Berlin
- European Central Bank
- Digital Euro
- Although the United States has chosen to cease production of penny coins due to high production costs, Germany continues to consider phasing out one- and two-cent coins, with the European Central Bank focusing on digital payments and a potential digital euro.
- In contrast to Germany's ongoing discussion about small coin denominations, the United States Treasury has decided to discontinue penny production, citing annual savings of around 50 million euros that could be achieved by doing so.
