Seigniorage

From Old French seigneuriage, "the right of the lord (seigneur) to mint coin," from seigneur, "lord," ultimately from Latin senior, "elder." In feudal times the ruler charged a fee for turning metal into coin; the word now names the broader gain from creating currency.

  1. noun · /SEEN-yer-ij/

    The profit a government makes from issuing money — the gap between what a coin or note is worth and what it costs to produce.

    It reveals a quiet source of state revenue: if a banknote costs a few cents to print but functions as a much larger sum, the difference accrues to whoever issues it.

    Printing high-value notes cheaply gives a government real income through seigniorage.

    Overusing this power feeds inflation — flooding the economy with new money erodes the value of every unit already in it.