The National Bank of Panama will stop importing one cent coins, its manager announced this week. The state-owned financial institution expects its reserve inventory of the coins to be depleted by June as it adapts to their gradual disappearance from the national commerce system.
Javier Carrizo Esquivel, general manager of the National Bank of Panama, confirmed the policy shift. He explained that coins already in public circulation will remain legal tender for years, even as the bank ends its role in supplying new ones. Their physical lifespan ranges between two and three decades.
“We are not going to bring in any more. By June we should already have no inventory in our reserve. The coins that banks hold and that continue to circulate will obviously keep circulating until the day they physically disappear. That will take years.” [Translated from Spanish]
This move formalizes a practical response to the coin’s declining use and production costs. It signals a coordinated shift in Panama’s cash-based transactions.
Rounding Law Proposal Sent to Finance Ministry
Parallel to halting import of new coins, the bank has submitted a formal “rounding law” project to the Ministry of Economy and Finance of Panama. This proposed legislation would establish official rules for cash rounding in retail transactions when one centavo coins are unavailable. The initiative also aims to encourage broader adoption of electronic payments nationwide.
Carrizo suggested the diminishing physical change could nudge consumers toward digital tools. Debit cards, mobile transfers, and other electronic methods would see a natural boost. The transition mirrors steps taken by other countries that have phased out their lowest-denomination coins.
The bank’s decision is not a recall or demonetization. Authorities emphasize there is no mandate for citizens to turn in their existing centavos. The phase-out relies entirely on natural attrition. Coins will slowly exit circulation as they are lost, stored, or collected.
“They will remain in the economic system as long as they stay in the hands of citizens and within banking entities.” [Translated from Spanish]
This gradual approach aims to minimize disruption for small businesses and cash-reliant consumers. The forthcoming law is designed to provide clear guidelines for merchants during the extended transition period.
Economic Implications and Sector Adaptation
Removing the smallest coin from production presents both logistical and symbolic challenges. Panama’s national bank and commercial banks must now manage cash operations without replenishing centavo stocks. Pricing strategies for goods and services may see subtle shifts, particularly for items traditionally priced at values ending in one to four centavos.
Economists view the policy as part of a modernizing trend. Reducing reliance on physical coinage lowers minting and distribution costs for the government. It also aligns with global digital payment trends accelerated by the pandemic.
The success of the rounding law will hinge on public acceptance and clear communication. Transparency in how final transaction totals are adjusted will be critical for maintaining consumer trust. The finance ministry is expected to review the proposal in the coming months before presenting it to the National Assembly.
For now, Panamanians can expect to see the familiar one centavo coin for a long time. Its journey out of the economy will be measured in years, not months. The National Bank’s policy simply marks the official starting point for its final chapter.