US President Donald Trump announced Sunday that he has instructed the US Treasury to stop producing penny coins, framing the move as part of his administration’s efforts to reduce government spending.

Trump made the announcement on his Truth Social platform, stating, “For far too long, the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful. I have instructed my Secretary of the US Treasury to stop producing new pennies. Let’s rip the waste out of our great nation’s budget, even if it’s a penny at a time.”

The Department of Government Efficiency (DOGE)—a cost-cutting initiative spearheaded by billionaire Elon Musk—has been reviewing federal expenditures and previously highlighted the financial inefficiency of penny production in a January post on X.

Discussions about eliminating the penny have been ongoing for years, with several bills introduced in Congress but never passed. The cost of producing a single penny has consistently exceeded its face value, with some estimates placing it at over 2.5 cents per coin. Canada eliminated its penny in 2012, citing production costs and declining purchasing power.

While Trump’s directive signals his determination to reduce wasteful government spending, experts note that implementing the decision may require Congressional approval. However, some analysts, including Robert Triest, an economics professor at Northeastern University, believe that Treasury Secretary Scott Bessent may have the authority to pause the minting of new pennies without direct legislative action.

The move, if enforced, would likely result in a rounding system for cash transactions, similar to Canada, where prices are adjusted to the nearest five cents in the absence of pennies.

Trump’s administration has prioritized budget reduction measures, with Musk’s DOGE team tasked with reviewing government spending and identifying inefficiencies. However, some of these efforts—such as attempts to cut staff at the US Agency for International Development (USAID)—have faced legal challenges from Democrats and labor unions.

While the elimination of the penny may seem like a small step, it is part of Trump’s broader economic policy, which includes reducing federal expenditures, cutting taxes, and streamlining government operations. The White House is expected to release further details on the timeline for the penny phase-out and how it will impact retail transactions, pricing, and coin circulation.

The decision is already sparking debate among economists, businesses, and lawmakers, with some applauding the cost-saving measure while others warn of potential disruptions in cash transactions and pricing structures.