The Common Cents Act would formally halt production of the penny, permit cash transactions to be rounded to the nearest nickel and authorize the Treasury Department to test a less expensive composition for the five-cent coin.
By yourNEWS Media Newsroom
The Senate has unanimously approved legislation that would formally end production of the penny while establishing new rules for cash transactions and giving the Treasury Department authority to explore a cheaper way to manufacture nickels.
The Common Cents Act passed the Senate by unanimous consent Friday, addressing practical issues created by the end of new one-cent coin production and the continuing cost of producing other denominations.
Pennies already in circulation would remain legal tender under the legislation, meaning consumers and businesses could continue using them. The measure recognizes, however, that retailers may increasingly lack pennies to return as change as the existing supply gradually becomes less available.
To address that problem, businesses would be permitted to round cash transactions to the nearest five cents. The legislation also seeks to resolve conflicts created by state and local rules that currently prohibit such rounding practices.
As The Hill reported, the Federal Reserve would also be required under the measure to limit “disruptions in the penny supply.”
The legislation follows the end of penny production for general circulation. The United States minted its final one-cent coin intended for circulation last year, leaving lawmakers to address how cash transactions should function as fewer pennies remain readily available.
The bill would not invalidate existing pennies or require consumers to stop using them. Instead, it establishes a framework for handling transactions when exact one-cent change is unavailable.
The Common Cents Act also targets the rising expense of producing nickels.
During fiscal year 2025, producing a five-cent coin cost 13.31 cents, more than twice its face value. In response, the legislation would authorize the Treasury Department to test alternative materials or compositions that could reduce manufacturing costs.
That provision would allow federal officials to examine whether the traditional nickel composition can be replaced with a less expensive formula while continuing production of the five-cent denomination.
Taken together, the measure would move the United States toward a cash system in which pennies remain valid currency but are no longer newly produced, retailers can round qualifying transactions to the nearest nickel and the government can pursue a more economical method of manufacturing nickels.
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