After phasing out the penny, what approach do you think the government should take regarding the unprofitable nickel?

Click here to take the poll and don't forget to share your thoughts in the WSB comments section.

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Rising prices for industrial metals, like copper (HG1:COM), zinc (LMZSDS03:COM), and nickel (LN1:COM), have made the cost of producing some modern-day coinage unsustainable. The U.S. Mint already killed the penny last year due to the economics, with labor inflation and other overhead only adding to the costs. The focus is now turning to other unprofitable coins, or what is known as negative seigniorage, where the Treasury loses money on every unit produced.

Some history: In the past, the federal government has taken two approaches when metal market values surpass face values. The first strategy phases out denominations, like the U.S. half-cent coin in 1857, and most recently the penny. The other approach is the modification of compositions, such as the removal of silver from coins in 1965 and the replacement of most copper with zinc in the penny in 1982.

The economics of the nickel are now being called into question, as the coin costs 13.31 cents to produce and distribute, marking a loss of more than 8 cents per piece. Dimes and quarters are more profitable, with the U.S. Mint achieving healthy margins on both. In fact, the positive seigniorage from those coins has subsidized the operational losses incurred by pennies and nickels, but that hasn't stopped lawmakers from demanding more changes and reforms.

Next up: Momentum is building behind the Common Cents Act, with the Senate recently passing legislation that would formally codify the end of penny production and establish standardized business rounding rules for cash transactions. The House already passed a similar measure on such a framework, though a complete bill would need to pass both chambers in order to move to President Trump's desk to be signed into law. The latest draft also authorizes the Treasury to reformulate the nickel using cheaper metal compositions, after H.R. 1270, a prior bill that proposed a full 10-year nickel production freeze, stalled in the House. (5 comments) Take the WSB survey.

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