italy’s Penny-Pinching Plan: Will the US Follow Suit?

Forget digging for loose change! Italy is on the verge of eliminating its 1 and 2 cent coins, a move that could reshape the nation’s payment landscape and spark debate about similar measures in the United States. The phasing out of these small denominations is more than just a minor adjustment; it’s a notable step towards a potentially cashless future.

Minting of 1 and 2 cent coins ceased in Italy back in 2018. By 2025, these coins are expected to vanish fully from everyday transactions. But what does this mean for consumers and businesses? The answer lies in a new rounding system.

Since the production halt, a rounding system for cash payments has been in effect.This system affects only the final total.Transactions ending in 1 or 2 cents are rounded down to zero; those ending in 3 or 4 cents are rounded up to 5 cents. Similarly, totals ending in 6, 7, 8, or 9 cents are rounded up to the nearest 10 cents. For example, a €10.52 purchase becomes €10.50,while a €10.54 purchase rounds up to €10.55.

While merchants are required to accept this rounding system for cash transactions, 1 and 2 cent coins remain legal tender. Consumers can still use them to pay the exact amount, thus avoiding the rounding process. This raises the question: when will these coins be completely abolished? The Italian goverment has yet to provide a definitive answer.

What Happens to the Coins? A Look at Canada

To understand the potential impact, consider Canada’s experience. In 2012, Canada stopped producing the penny. Their rounding system, similar to Italy’s, rounds cash transactions to the nearest 5 cents. Electronic payments remain unaffected. This change resulted in “significant savings,” according to Canadian officials, by eliminating the costs associated with coin production and distribution.While the coins remained legal tender, they gradually disappeared from daily use, demonstrating a relatively smooth transition for consumers.

The Future of Cents in Europe and the US

The european Union has been considering the complete abolition of 1 and 2 cent coins for some time. According to European Commissioner Paolo Gentiloni, a potential timeline for this is 2025, although this remains uncertain. “The total abolition of coins is near and all that remains is to get rid of them definitively. Soon they will be just a collector’s item,” he stated. The success of this initiative hinges on the obvious and fair implementation of the rounding system, ensuring consumers aren’t disadvantaged. Clear communication with shoppers is crucial to maintain trust and avoid confusion.

The elimination of these small denominations represents a significant shift. While it promises cost savings and simplification, careful management of the transition is essential. This raises a key question: could this be a small step towards a more digital-centric payment system in the US, or will the value of physical currency remain too high to make such a change feasible?

Italy’s Penny-Pinching Plan: Will the US Follow Suit?

Forget digging for loose change! Italy is on the verge of eliminating its 1 and 2 cent coins, a move that could reshape the nation’s payment landscape and spark debate about similar measures in the United states. The phasing out of these small denominations is more than just a minor adjustment; its a notable step towards a perhaps cashless future.

Minting of 1 and 2 cent coins ceased in Italy back in 2018. By 2025, these coins are expected to vanish fully from everyday transactions.

But what does this mean for consumers and businesses? Could this be a glimpse into the future of currency in the US? To understand the potential impact and answer these questions, we’ve invited Dr. Emily Carter, a renowned economist specializing in currency policy and consumer behavior, to join us today.

Eliminating the Small Cents: How Does it Work?

Tianna Lee,Senior Editor,World Today News: Dr. Carter, Italy is implementing a unique system for phasing out its 1 and 2 cent coins. can you explain how this rounding system works?

Tianna Lee: While 1 and 2 cent coins remain legal tender in Italy, they’re gradually disappearing from daily use. What lessons can other countries, like the US, learn from Italy’s experience?

Dr. Emily Carter: Canada provides a great example. they eliminated the penny in 2012, implementing a similar rounding system. The transition was surprisingly smooth. People adapted quickly, and the cost savings for the government were ample. It eliminated the expense of producing, distributing, and managing these low-value coins.



The key to success lies in clear dialog. Educating the public about the new system, addressing concerns, and ensuring transparency are crucial to gaining public acceptance.

Tianna Lee: Do you think a similar approach might work in the US? Or would the cultural aversion to abandoning physical currency be too strong?

Dr. Emily Carter: It’s an interesting question.The US has a strong attachment to physical currency. However, the cashless trend is definitely gaining momentum globally, and the US is no exception.Smartphones and digital payment systems are becoming increasingly ubiquitous.

While I don’t see the US eliminating the penny entirely in the near future, it wouldn’t surprise me if we adopted a rounding system or adjusted denomination values in the long term.



Ultimately, the decision hinges on a complex interplay of economic factors, consumer behavior, and cultural attitudes.