India, July 9 -- Phasing out the penny is set to involve some cost to U.S. consumers paying in cash as businesses are set to round transactions to the nearest nickel, new research from the Federal Reserve Bank of Richmond revealed on Wednesday.
The U.S. government is set to end the production of new pennies, which has become a loss-making process, early next year.
In 2024, the Treasury incurred an $85.3 million seigniorage loss, which is the difference between the face value of the small coin and the cost to produce it, from minting over three billion new pennies. According to the U.S. Mint, producing and distributing a single penny costs 3.69 cents, nearly four times its face value.
Based on the 2023 Diary of Consumer Payment Choice, ec...