After the Penny, Congress Is Coming for the Nickel
The penny is dead, and now Congress has its sights set on the nickel. A new bill would let the Treasury test a cheaper metal mix for the 5-cent coin, because making one costs nearly 13 cents.
It cost 13.31 cents to produce a single nickel in fiscal year 2025, down slightly from 13.78 cents in fiscal year 2024. That marks 20 consecutive years that nickel production costs have stayed above the coin's face value.
The Common Cents Act
The bill, known as the Common Cents Act, would not eliminate the nickel. Instead, it gives the Treasury Secretary authority to test and evaluate alternative compositions and suggest a new makeup for the coin if it reduces the cost of production while having a minimal adverse impact on machines designed to accept coins.
One option under consideration: making the nickel out of zinc with an outer layer of nickel. Only the penny and the $1 coin currently use zinc, which was nearly $7,000 per tonne cheaper than copper last year. Today's nickel is 75% copper and 25% nickel.
The penny's demise
The penny's fate pushed this bill forward. President Trump directed the Treasury to stop minting pennies in early 2025, calling them wasteful, and the last batch of pennies was struck last November. The Treasury estimated $56 million in annual savings from ending penny production.
The Common Cents Act would also create consistent rules for rounding cash transactions to the nearest five cents once pennies fade from circulation. The bill has passed both the House and the Senate and is awaiting the president's signature.
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Options market and stocks to watch
A cheaper nickel is mostly a cost-savings story, not a trade. But metals markets will care about the composition call. A shift toward zinc and away from copper and nickel content could marginally reduce industrial demand for both metals, worth watching in futures and the miners like FCX for copper and VALE for nickel.
Retailers and payment processors are the practical winners: the National Retail Federation and the National Association of Convenience Stores both cheered the bill's rounding rules as a solution to a real problem. Watch SQ and FIS names if cash-handling friction continues to fade.
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