CNN has questioned the viability of the 5-cent coin, as the US minted its final 1-cent coin 4 days ago.

Economically, the 5-cent coin faces a stronger case for discontinuation than the 1-cent coin. While a 1-cent coin costs 5 cents to produce, a 4-cent difference from its face value, the 5-cent coin's production cost exceeds its value by 9 cents. This means the cost to produce each 5-cent coin is nearly three times its actual worth.

Blank coins prepared for stamping at the Philadelphia mint on 12/11. *Reuters*

The 1-cent coin, or penny, is composed of 97,5% zinc and 2,5% copper. In contrast, the 5-cent coin, known as a nickel, contains 75% copper and 25% nickel. While zinc prices have remained relatively stable, the cost of copper and nickel has nearly doubled since late 2016.

Mark Weller, chief executive officer of the lobbying organization Americans for Common Cents, stated that the US Mint and Artazn, a zinc blank manufacturer and one of its suppliers, are exploring methods to reduce the production cost of the coin to below 5 cents. Artazn, the world's largest producer of zinc ingots and finished zinc products, is also a primary sponsor of the aforementioned advocacy group.

“Coincidentally, copper and nickel are the two most expensive metals we can use,” Weller said. He added that research into reducing production costs could be completed within one year, resulting in a new 5-cent coin with a shape similar to the current one.

However, production cost is not the sole issue for the 5-cent coin. Similar to the 1-cent coin, the 5-cent coin has limited utility, as Americans are increasingly using coins less frequently.

In fact, other countries have quickly phased out small denomination coins. New Zealand and Australia ceased production of their 5-cent coins in the 2000s, nearly 20 years after they had discontinued their 1-cent coins.

A worker at a coin mint crafting a 5-cent coin during World War II. *AP*

David Smith, an economics professor at the Graziadio Business School at Pepperdine University in California, US, noted that the reduced use of cash alleviates pressure to eliminate the 5-cent coin and also lowers production costs. Smith, a passionate coin collector with many fond memories of these coins, believes that discontinuation will occur, though it might take 15 or 20 years.

Meanwhile, Weller, representing the coin advocacy organization, argued that eliminating the coin in favor of a cashless economy would create numerous issues, particularly for low-income users.

“In reality, abandoning cash benefits large banks and credit card companies,” Weller said. “They charge businesses fees every time someone swipes a card, and those costs are ultimately passed on to consumers.”

Retail stores, facing a shortage of 1-cent coins, are exploring whether they are permitted to round customer purchases up to 5 cents, currently the smallest currency unit. They are also urging Congress to pass legislation to confirm this move.

If the 5-cent coin is also eliminated, rounding cash purchases up to 10 cents could become more complicated. A study earlier this year by the Federal Reserve Bank of Richmond, part of the US Federal Reserve (Fed), indicated that rounding purchases to the nearest 5 cents would cost Americans a total of 6 million USD annually.

However, if that amount were divided among 133 million households, each household would incur a loss of only 42 cents.

Meanwhile, changing the composition of the 5-cent coin does not entirely eliminate all production cost concerns. Even if the manufacturing fee drops below 5 cents, administrative and distribution costs for each coin still amount to 2,8 cents.

Bao Bao (*according to CNN*)