Seigniorage

Common card · No. 260986

Seigniorage , also spelled seignorage or seigneurage (from Old French seigneuriage 'right of the lord (seigneur) to mint money'), 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. Seignorage can also refer to: Seigniorage derived from specie (metal coins) is a tax added to the total cost of a coin (metal content and production costs) that a customer of the mint had to pay, and which was sent to the sovereign of the political region. Seigniorage derived from banknotes is the difference between interest earned on securities acquired in exchange for banknotes...

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