What Scrapping the Nickel Could Mean for the Future of Cash

The United States recently stopped making pennies, and now some people in Washington are asking whether the nickel should go next. The nickel is a five-cent coin that has been part of American money for 160 years. It costs the U.S. Mint more than 13 cents to make and ship each nickel — more than twice what the coin is actually worth. That has lawmakers debating whether the country should keep producing it at all.

The penny was the first coin to go. The U.S. Mint stopped making pennies for everyday use in November 2025, ending a 232-year run. Pennies already in people's pockets and cash registers are still legal to use, but no new ones are being made. That means the nickel is now the smallest coin that the government still produces in large numbers.

Without pennies, stores that accept cash have to round prices to the nearest five cents. A new law called the Common Cents Act — which has passed both the House and the Senate in separate versions — would create national rules for how that rounding works. But if the nickel were also eliminated, stores would have to round to the nearest ten cents instead, which could mean bigger price differences for shoppers.

Researchers at the Federal Reserve Bank of Richmond looked at what rounding could cost regular people. They found that getting rid of just the penny might cost consumers about $6 million a year in rounding charges. But if the nickel disappeared too, that number could jump to nearly $56 million a year. In comparison, making 202 million nickels cost the government about $17.7 million more than those coins were worth in 2024.

Cash is being used less than it used to be, but it has not gone away. The Federal Reserve reported that cash made up 14 percent of all consumer payments in 2025. About four out of five Americans used cash at least once in the past 30 days, and nine out of ten said they planned to keep using it. Still, younger people and higher-income households tend to use cash far less often than older people and lower-income households.

Some groups depend on cash more than others. People aged 55 and older made about 10 cash payments a month on average in 2025. A government agency called the FDIC found that more than 66 percent of households without bank accounts relied entirely on cash. For these people, losing another coin denomination could make everyday shopping harder and more expensive through rounding.

Financial expert Dmitri Maxim explained why the decision is complicated. He said the government cannot keep losing money on every nickel it makes, but he also pointed out that money is not like a normal product — it is part of the country's basic financial system. He warned that making the payment system more efficient should not make it harder for lower-income people to participate in the economy. "We also shouldn't turn efficiency into exclusion," he said.

Other countries have already removed their smallest coins without major problems. New Zealand stopped using its five-cent coin in 2006 and found that prices were not greatly affected. However, Americans seem less open to the idea. A poll taken in November 2025 found that 58 percent of U.S. adults opposed getting rid of both the penny and the nickel, and opposition had grown compared to earlier in the year.

Congress is currently looking for a middle ground rather than eliminating the nickel. One proposal would allow the nickel to be made with cheaper materials — an inner zinc layer covered by an outer nickel layer — to bring down production costs. A separate bill from Arizona Representative David Schweikert would pause production of both the penny and nickel for 10 years while the government studies rounding. That bill has not moved forward yet.

A separate piece of legislation called the Payment Choice Act of 2025 would require most physical stores to accept cash for purchases of $500 or less. It would also stop stores from charging cash-paying customers more than card-paying customers. Together, these debates show that the future of cash in America is about more than just coins — it is about making sure everyone can take part in the economy fairly.