President Trump’s February 2025 announcement to phase out penny production marks a significant shift in America’s monetary system as cash and coins begin to disappear from daily transactions.
The U.S. Treasury Department’s decision to end penny manufacturing after 238 years comes as cash usage plummets nationwide. The way Americans spend money has fundamentally changed as cash and coins disappear from wallets, signaling a potential end to physical currency.
Cash transactions in 2024 dropped to 14 percent of all transactions made in the United States. Adults aged 18-24 led in this shift with being more likely to pay with mobile phones, accounting for 45 percent of all payments. Households earning under $25,000 per year and adults age 55 and older relied more on cash than other groups. Mobile wallets, credit cards and digital payment apps have replaced the need to carry physical money.
Global cashless payment volumes increased by more than 80% from 2020 to 2025, rising from approximately one trillion transactions to almost 1.9 trillion. The United States recorded 86.9% of point-of-sale transactions as cashless in 2024, with projections reaching 94.1% by 2027.
Some students believe the transition away from physical money feels natural rather than concerning. “I think that it’s natural that cash payments are becoming less common, especially with the technology available to be able to pay on a phone versus having to bring cash around all the time,” said senior Tate Sommer. “Similar to how certain technologies nowadays are used instead of outdated versions, cashless payment is the next step for the economy and innovation.”
Sweden leads the transformation toward a cashless society globally, with only 1.3% of transactions using cash. The country is projected to become fully cashless by the end of 2025. Many Swedish banks no longer handle cash, and some stores refuse to accept physical money entirely. Japan exceeded its government goal by reaching 42.8% cashless transactions in 2024, prompting the acceleration of payment infrastructure modernization.
The decline of current physical currency has prompted governments to eliminate costly coins. In Feb. 2025, the U.S Treasury Department announced that it will phase out production of new pennies. Producing a single penny cost 3.69 cents in 2024, more than doubling from 1.3 cents in 2014. The annual loss from penny production reached $85.3 million to taxpayers.
Some students believe Trump’s plan could have strong adverse effects on Americans. “I firmly believe that President Trump’s plan to ban pennies is not a wise decision. It has been modeled through countries around the world–Germany after WWI, and the most recent occurrence being in 2007 with Zimbabwe–that have experienced hyperinflation. When the governments begin to produce large bills or disregard smaller change to keep up with the skyrocketing prices, the only thing it does is accelerate the rate that hyperinflation grows,” said junior and FBLA executive member Lily Lang. “While America may now just only be experiencing inflation and not the extremes of hyperinflation, President Trump’s current plan to stop producing pennies will only be the start until dollar bills have no use and so forth, eventually tipping America’s economy over the edge and towards its downfall.”
However, recent evidence from other countries suggests a different outcome. In 2012, Canada discontinued its penny without economic disruption. Retailers simply round prices to the nearest nickel, with research showing virtually no effect on consumers. The U.S. nickel may follow the penny’s path, as producing one costs approximately 14 cents.
Beyond eliminating physical coins, governments have begun exploring entirely new forms of currency. China has launched a digital yuan that functions like cash but exists digitally, allowing the government to track all transactions. Over 260 million people have opened digital yuan wallets since its 2020 pilot launch.
Students see potential benefits in a fully digital monetary system, particularly for international commerce. “Having a global cashless society could help with converting between the currencies of different countries. Other than that, I don’t think there would be that many changes a global cashless society may have since technological currencies are already so prevalent in the current world,” said Sommer.
Concerns about financial inclusion persist as physical currency decreases. Households earning under $25,000 relied on cash for 24% of their payments in 2024, compared to only 9% for households earning over $150,000. As well as the fact that elderly populations and rural communities often lack access to digital payment infrastructure. In 2023, approximately 5.6 million U.S. households remained unbanked, having no checking or savings account..
The convergence of declining cash use, coin elimination and digital currency experimentation signals fundamental changes in how societies exchange value. Whether physical money will exist in the next decades remains uncertain as technology reshapes the most fundamental economic function.
