Sayonara to Small-Cent Coins

Several European countries have been working to reduce cash usage. As a crime prevention measure, the European Union has announced that starting in 2027, cash transactions over €10,000 will be banned. Additionally, the Netherlands, Italy, Ireland, Finland, and Belgium have stopped producing small-cent coins for environmental reasons. 

As a step toward phasing out 1- and 2-cent coins, Estonia and Lithuania will begin rounding all transactions to the nearest five cents in 2025. “They are costly to produce and handle and have a significant environmental impact,” states Estonia’s central bank. “They don’t buy much and are rarely used for payments, so they tend to remain unused and don’t circulate.” The rounding rule means that no new small change needs to be struck.

On the flip side, small-cent coins can contribute to financial freedom. Some Europeans are concerned that eliminating 1- and 2-cent coins will increase inflation and raise shopping costs. The low-denomination cents can offer practical, psychological, social, and cultural benefits, and the long-term effects of their removal are yet to be seen.