The Common Cents Act heads to the White House as Congress establishes a formal framework for cash rounding and the end of the penny

The era of the one-cent coin in the United States is officially drawing to a close as the Common Cents Act cleared its final legislative hurdle on Monday, September 29, 2026. The bill, which establishes a federally mandated framework for retailers to round cash transactions, has been sent to President Donald Trump’s desk for his signature. This legislative milestone concludes a years-long debate regarding the economic viability of the penny and the practical challenges of transitioning a retail economy away from the smallest unit of currency.

The passage of the bill followed a complex legislative journey, requiring secondary votes in both the House of Representatives and the Senate due to specific amendments. After the Senate endorsed the bill in August with an added provision concerning executive oversight, the House was required to revisit the measure earlier this month. Monday’s final Senate ratification signals a bipartisan consensus on modernizing the American payment landscape, effectively codifying how merchants should handle cash transactions in an environment where the penny is no longer in active, large-scale circulation.

A Legislative Chronology of the Penny’s Demise

The path to this legislation was paved by executive action that preceded the formal congressional mandate. In February 2025, President Trump directed the U.S. Treasury to cease the production of pennies, citing the prohibitive cost of minting a coin that cost significantly more than its face value to produce. By November 2025, the U.S. Mint held a ceremonial strike for the final production run of the circulating one-cent coin, marking the end of a currency tradition that had persisted in its modern form for decades.

Following the cessation of production, the retail industry faced a logistical vacuum. Without a federal guideline for rounding, merchants were left to develop disparate internal policies, creating potential consumer confusion and inconsistency in pricing. The Common Cents Act was introduced to address this, serving as a standardizing mechanism. The bill saw primary sponsorship from a bipartisan coalition, including Michigan Republican Representative Lisa McClain and California Democrat Representative Robert Garcia in the House, and Senators Cynthia M. Lummis (R-WY) and Kirsten Gillibrand (D-NY) in the Senate.

The bill’s passage was delayed briefly by an amendment from Senator Elizabeth Warren (D-MA). The amendment, which was integrated into the Senate version, mandates that the Treasury Department must provide formal notification to Congress regarding any future plans to discontinue other forms of currency. This requirement includes the submission of a comprehensive transition plan, ensuring that future monetary policy changes undergo greater legislative scrutiny. This amendment necessitated a second round of voting in both chambers, which successfully concluded this week.

The Economic Case Against the Penny

For decades, the United States Mint has reported losses on the production of both the penny and the nickel. According to official Treasury data, the cost to produce and distribute a single penny consistently exceeded two cents. When multiplied by the billions of coins produced annually, this represented a significant drain on public funds. The Treasury Department estimated that the cessation of penny production would result in annual taxpayer savings of approximately $56 million.

Beyond the raw production costs, economists have long pointed to the "opportunity cost" of the penny. Time spent by consumers searching for exact change and the labor costs associated with counting, rolling, and transporting heavy copper-plated zinc coins represent a drag on retail productivity. Retail industry representatives have consistently argued that the burden of maintaining the penny outweighs its utility, particularly as electronic and digital payment methods continue to capture a larger share of transaction volume.

The Common Cents Act does not ban the existence of the penny entirely; rather, it transitions the coin into a collectible status. The U.S. Mint will retain the ability to produce pennies for numismatic purposes, ensuring that the coin remains part of the American historical record while removing it from the daily transactional ecosystem.

Industry Reaction and Retail Implications

The National Retail Federation (NRF) has been one of the most vocal proponents of the legislation. In a formal statement issued on Tuesday, Dylan Jeon, vice president of government relations at the NRF, described the bill as a "solution to a real problem for retailers." Jeon emphasized that the legislation provides much-needed consistency, which is essential for maintaining consumer trust at the point of sale.

"This is a pragmatic step forward that recognizes the evolution of our payment systems," Jeon noted. "Retailers have been operating in a state of uncertainty since the production of the penny stopped. This bill provides a clear, uniform framework that protects businesses from fragmented state-by-state approaches and gives consumers clear expectations on how their cash change will be calculated."

The NRF has urged President Trump to sign the bill into law immediately, highlighting that the lack of a federal standard has forced many retailers to adopt voluntary, non-standard rounding policies that vary by region and chain. The new law will provide a uniform "round-to-the-nearest-nickel" approach, which is expected to smooth out transaction times and simplify cash handling for front-line workers.

Beyond the Penny: Future Currency Reforms

While the focus of the Common Cents Act is on the penny, the legislation also contains provisions that suggest a broader look at the U.S. coinage system. The bill directs the Treasury Department to conduct a feasibility study on alternative metal compositions for the nickel.

The 5-cent coin, like the penny, currently costs more to produce than its face value. By investigating the use of zinc or other cost-effective alloys to replace the current copper-nickel composition, the government aims to mitigate the losses associated with the production of the nickel. This directive aligns with a growing movement in Washington to modernize the physical currency supply chain to better reflect current commodity prices and fiscal constraints.

The Broader Economic Impact

The move toward a cash-rounding framework is not unique to the United States. Countries such as Canada, Australia, and New Zealand successfully phased out their lowest-denomination coins years ago, implementing similar rounding strategies for cash transactions while keeping digital payments precise. The American experience is expected to mirror these international precedents, where initial public apprehension regarding "hidden costs" quickly dissipated as the convenience of faster transactions became apparent.

From a macroeconomic perspective, the impact of the Common Cents Act is expected to be neutral on inflation. Because the rounding rules are designed to round up and down based on the proximity to the nearest nickel, the mathematical expectation is that the effects will cancel each other out over time. Retailers are expected to display clear signage regarding their rounding policies, and digital transactions will remain unaffected, continuing to process at the exact cent.

As the bill heads to the Oval Office, the focus shifts to implementation. Once signed, the Treasury Department and the Federal Reserve will likely issue guidance to financial institutions and retailers on how to transition their point-of-sale software and cash-handling procedures. For the average American, the change represents the final step in a shift that has been occurring for years: the slow but steady migration away from physical cash in favor of more efficient, digital-first commerce.

The passage of this act marks a symbolic end to the era of the "common" penny. While the coin will remain in circulation for some time as a legacy of the past, the legislative framework is now in place to prioritize efficiency and modern economic standards. The White House has not yet set a specific date for a signing ceremony, but with bipartisan support in both the House and the Senate, the measure is expected to become law without further delay.