(8) Some much more recent contributors to the currency board literature have sought to play down the costs of the seigniorage
problem by suggesting that, after adjusting for risk, differences in rates of return on domestic and foreign investments have not been significant.
Now, add in savings from reduced processing costs and seigniorage
revenue, and subtract increased costs.
To compensate, to a certain extent, for the loss of seigniorage
, central banks can also charge fees for giving a licence for issuers or start issuing e-cash themselves.
Accordingly, the chart shows that seigniorage
revenue per year has been about one-third of 1 percent of GDP for Argentina, or U.S.$1.2 billion per year.
channel is the third channel of the monetization relation.
Another major reason for the high growth rates of money supply in LDCs is the revenue from seigniorage
that the governments obtain through the right to create money.
and loss, but rather always generates seigniorage
for every amount
Sargent and Wallace (1981) also report the non-neutrality of fiscal policy by identifying the effects of seigniorage
on inflation and growth.
Additionally, the United States generates excessive seigniorage
revenues as the dollar is still the most important reserve currency in the balance sheet of all major central banks.
"The grant component could be financed through contributions from euro area Member States equivalent to a share of the profits they make through the production of euro coins (seigniorage
)," the Commission said.
Currency substitution also leads to the loss of seigniorage
Under game-theoretical perspectives, I'm sure that central banks would lose part, or all of their seigniorage
rights, and in my point of view, this is where we're going.