The US nickel may soon disappear for good
Less than a year after the U.S. penny was placed on the chopping block, the humble U.S. nickel might be the next piece of pocket change to get an early retirement. Congress is already moving to phase out the penny, but lawmakers now want the Treasury Department to figure out whether the five-cent coin can be made cheaply enough to justify keeping it around.
The nickel costs more than five cents to make
Nickels are currently made from 75% copper and 25% nickel. According to the latest figures, producing one costs roughly 13 cents, meaning taxpayers are losing about eight cents every time a nickel rolls off the presses.
Rep. Lisa McClain, R-Mich., said the goal is to find a cheaper composition for the coin without creating problems for the vending machines and other devices that still accept physical change. The Common Cents Act already gives Treasury a path to authorize a cheaper nickel composition if testing shows it can lower production costs without significantly disrupting coin-operated machines.
The penny is already heading for the exit
The nickel conversation follows the federal government's push to stop producing pennies for general circulation. The Treasury Department announced in December 2025 that the Mint would stop producing pennies, which had become particularly expensive to manufacture. The Common Cents Act would make the phaseout part of federal law, although President Donald Trump still needs to sign the legislation.
If the bill passes, existing pennies would not suddenly become useless. They would remain legal tender, meaning that dusty jar of coins sitting somewhere in your house isn't about to become a collection of tiny worthless discs. Most pennies are still worth exactly one cent, although older copper pennies and coins with rare minting errors can be worth considerably more.
Cash totals could start getting rounded
If the penny disappears, cash purchases would be rounded to the nearest five cents when exact change is not available. The proposed rules would work like this:
- 1 or 2 cents: Round down.
- 3 or 4 cents: Round up to 5 cents.
- 6 or 7 cents: Round down.
- 8 or 9 cents: Round up to the next 10 cents.
This way, a $12.02 cash purchase could become $12.00, while $12.04 could become $12.05.
How much money will be lost?
Don Bruce, director of the Boyd Center for Business and Economic Research at the University of Tennessee, said the rounding system would likely produce a small net increase nationwide because purchases are more likely to end in eight or nine cents. A Federal Reserve Bank of Richmond estimate puts the overall effect at around $6 million nationwide, or roughly $1.50 per person per year.
So, we are not exactly talking about the next great American financial crisis.
