When President Donald Trump directed the U.S. Treasury to stop minting new pennies in early 2025, many Americans were left wondering how it would impact their daily cash transactions. Now, the U.S. Congress has stepped in to answer many of those questions, with each chamber passing its own version of the Common Cents Act to allow for rounding to the nearest nickel.
The bills would keep pennies as legal tender, but allow sellers to round the after-tax amounts used in cash transactions up or down to the nearest nickel when exact change can’t be provided. Payments made using electronic fund transfers, credit cards, gift cards, or similar payment methods would continue to be priced to the nearest penny.
The U.S. House of Representatives passed its version of the Common Cents Act (H.R. 3074) on July 14 and the Senate passed its bill (S. 1525) on Aug. 7. Late amendments to the Senate bill made it nearly identical to the House bill. The House is expected to pass the Senate’s version of the legislation and send it to the president to be signed.
Rounding Would be Optional
Under the legislation, rounding would remain optional and could be used by any person, including financial institutions, selling goods or services in a cash transaction that results in a cash payment if exact change can’t be provided. There are also safe harbor provisions stating that rounding payment amounts as authorized in the Common Cents legislation can’t be found to have violated federal, state, or local laws. Cash payments from employers to employees may be rounded to the nearest nickel, but there is no requirement that employers do so.
Specifically, the Common Cents Act would provide that when a transaction total ends in 1, 2, 6, or 7 cents, the amount would be rounded down to the nearest nickel. Amounts would be rounded up for transactions where the total is 3, 4, 8, or 9 cents. Retailers also have the option of simply rounding the amounts owed by customers down to the nearest nickel. For small transactions where the amount totals 1 or 2 cents, the amount would be rounded up to 5 cents for any person seeking to pay with cash.
Penny Production Stopped in 2025
Trump announced that the Treasury Department would stop minting pennies in a Feb. 9, 2025, Truth Social post. The final penny was minted in November 2025. The Treasury Department noted that over the last 10 years, the cost of producing pennies had increased from 1.3 cents to 3.69 cents per penny. It said that stopping production of the penny is projected to save the U.S. Mint $56 million annually in reduced material costs.
Congress has previously passed legislation authorizing the Treasury secretary to issue and circulate coins, but the U.S. Constitution grants Congress the exclusive power to coin money and regulate currency. As a result, it was not clear whether Trump actually had the power to stop the Treasury Department from minting pennies. The Common Cents Act would resolve that question by through a provision stopping the production of 1-cent coins for general circulation. The coins could still be minted as collectibles.
According to the Treasury Department, the Federal Reserve will continue recirculating the approximately 114 billion existing pennies for as long as possible.
Possible Changes to the Nickel
The legislation would also give the Treasury Department the power to test changes to the metals used to make nickels to determine whether it can produce less expensive versions of the coins. Currently, nickels are composed of a layer of copper that is sandwiched between two layers of nickel. As a result, the coins are roughly 75% copper, the price of which has increased substantially in recent years. The Common Cents Act would authorize the department to produce nickels composed of an inner layer of zinc between two layers of nickel. If possible, any new version of the coin should have a minimal impact on machines designed to accept coins.
The Takeaway
In passing the Common Cents Act, Congress has begun taking the steps necessary for a future where pennies may not be available by providing a voluntary framework for American businesses to round to the nearest nickel. However, the rounding option does not apply to electronic payments or card transactions.
