Short answer: The U.S. stopped producing new pennies for circulation mainly because it costs more to mint a penny than its face value, and changing cash habits reduce the practicality of the coin. The change was driven by a combination of rising production costs, limited ongoing demand for pennies in everyday transactions, and a policy shift at the highest levels that moved toward rounding cash payments and relying more on digital payments. What happened and why

• Cost vs value: Each penny costs more than its 1-cent face value to mint and distribute. When minting costs approach or exceed the coin’s value, continuing production is economically inefficient. This dynamic is the central economic argument for reducing or stopping new penny production. [source: general industry reporting and government statements; see contemporaneous news coverage and analyses]
• Policy and leadership actions: In recent years, high-level statements and orders signaled a move away from repeatedly minting pennies. While Congress formally controls currency, executive actions can influence the pace and emphasis of penny production, especially when paired with the Treasury and Mint’s budgetary considerations. The policy direction has emphasized cost savings and modernization of the currency system. [source: contemporaneous reporting on policy actions and treasury/mint communications]
• Usage and cash handling trends: Cash in daily life has diminished as a share of transactions. More people use cards, digital wallets, and other forms of payment, which reduces the practical utility of a large stock of pennies. This accelerates the decision to cease producing new pennies, even as existing pennies remain legal tender and continue to circulate. [source: reflections on payment habits and retail cash handling trends]
• Transition plan: Even after stopping new penny production, existing pennies remain legal tender. Retailers and banks may adapt by rounding prices or adjusting cash-handling practices as the stock of pennies in circulation becomes sparse. This kind of transition has precedent in other countries that phased out small denomination coins while preserving the currency system's integrity. [source: coverage of transition discussions and regional analogues]

Notes and caveats

• The penny remains legal tender, and individuals can still use old pennies, deposit them, or keep them as keepsakes. Any complete elimination of the penny would require legislative action by Congress to modify the currency statutes. [general legal framework and coverage]
• Different outlets report varying timelines for full cessation and rounding schedules; the specifics depend on official announcements, treasury/mint implementation, and retail adaptation. Always refer to the latest official statements for precise dates. [general advisory]

If you’d like, I can pull up the latest official sources or summarize a timeline of key announcements and estimates from reputable outlets.