Money & WorkFact

The state earns money from the cash in your pocket.

Seigniorage is the profit from issuing central bank money. It comes not from paper versus face value but from interest: the central bank issues cash that pays nothing and holds interest-bearing assets against it. The profit is paid out to the government budget.

Useful: Economists call it a tax on holding cash – you pay it without ever getting an assessment notice.

Source: de.wikipedia.org

GeldStaatZentralbank

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