What Scrapping the Nickel Could Mean for Future of Cash

The smallest U.S. coin, the nickel, may soon face the possibility of being discontinued as production costs have risen to more than double its face value, making it the most expensive coin to manufacture and distribute. The nickel has been in circulation for 160 years, featuring Thomas Jefferson on its face since 1938. While ending its production would save the government money in the short term, it would also mark a significant change in the physical money system, reducing the smallest denomination for most cash transactions to the dime.

This could potentially lead to a more imprecise and less convenient cash system. Despite a decline in cash usage, cash still accounts for 14% of consumer payments in the U.S., with a majority of consumers planning to continue using it. Congress is considering measures to make the nickel cheaper to produce or eliminate it, while separate legislation aims to protect consumers' ability to pay with cash.

If the nickel were to be eliminated and cash transactions rounded to the nearest dime, it could cost consumers nearly $56 million annually in rounding expenses, compared to $17.7 million in losses in 2024. The decision to scrap the nickel should take into account the impact on various groups, especially those who rely heavily on cash, to ensure that the move does not disproportionately burden certain populations.