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MENTAL MODEL · M5937

Seigniorage

Seigniorage
BusinessHigh supportMonetary Economics
Included
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Version 1.0.0 · Updated 2026-07-30

CORE DEFINITION

The profit obtained by the currency issuer (government/central bank) by virtue of its issuance right. That is, the face value of money minus its physical production cost. In the fiat currency era, this is almost equivalent to costless purchasing power plunder.

SCAFFOLDING EFFECT

psychology

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The ultimate privilege of a platform. The ultimate business model of any platform is to issue its own 'currency' (points, tokens, credit scores). As long as users accept it and it circulates within the ecosystem, the platform obtains the privilege of levying seigniorage on all users.

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The currency issuer produces money at a cost far below its face value, and the difference between face value and cost is seigniorage. In the fiat currency system, the central bank obtains purchasing power at near-zero cost by expanding the money supply, which is essentially a hidden tax on currency holders.

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Source support: Explicit

  • link
    en.wikipedia.orghttps://en.wikipedia.org/wiki/SeigniorageZH · Explicit
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