WASHINGTON — The Federal Reserve announced new measures this week aimed at maintaining the circulation of pennies for commercial use, following recent disruptions related to the end of penny production.
Beginning January 14, the Federal Reserve will start accepting penny deposits from banks and credit unions at commercial coin distribution locations. The services will be available under existing arrangements with the Federal Reserve that had previously been paused at some sites due to local inventory shortages.
“While the Federal Reserve continues to support penny deposits, local inventory constraints had limited that activity at some locations,” the central bank said in a statement. “Our monitoring of the flow of penny deposits from financial institutions as these changes take effect will determine whether some subsequent expansion of ordering options for pennies is feasible, given that penny production has ended.”
The Federal Reserve’s role in coin operations is limited to distributing coins to banks and credit unions on behalf of the U.S. Mint, the country’s issuing authority for coins. The Fed does not distribute coins directly to businesses or consumers.
The announcement comes after pressure from lawmakers, including a recent letter from Republicans on the House Financial Services Committee, urging the Federal Reserve to reopen coin terminals to ease circulation bottlenecks.
In late December 2025, the U.S. Department of the Treasury released frequently asked questions regarding the end of penny production, providing guidance for merchants. Recommendations included rounding cash transactions to the nearest five cents as pennies gradually stop circulating.
The NACS has been advocating for federal legislation that would allow retailers to round cash transactions to the nearest nickel and provide a safe harbor for businesses that do so. NACS has previously met with Treasury officials and urged both the Senate Banking Committee and the House Financial Services Committee to pass legislation that would ensure retailers can continue handling cash transactions amid increasing pennies shortages.
NACS has prioritized resolving the issue and will continue to provide updates as developments occur.
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