seigniorage
Sign in to saveSeigniorage , also spelled seignorage or seigneurage (), is the profit a government makes from issuing currency, which is the difference between the face value of money and the cost of producing it.
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Encyclopedic overview
7 sectionsContents
- {{anchor|Contemporary usage}}Contemporary use
- Ordinary seigniorage
- Solvency constraints of central banks
- {{anchor|Overseas circulation}}International circulation
- See also
- References
- External links
Seigniorage , also spelled seignorage or seigneurage (), is the profit a government makes from issuing currency, which is the difference between the face value of money and the cost of producing it.
The term historically referred to a lord's right to mint coins, but today includes revenue from creating coins and banknotes, and interest earned by the central bank from its conduct of monetary policy. Seigniorage earned is equivalent to the increase in the money supply due to money creation minus the cost of producing the additional money.
Excerpted from Wikipedia’s “seigniorage” article, available under the CC BY-SA 4.0 licence.