Charge over and above the expenses of coinage that is deducted from the bullion brought to a mint to be coined. From early times, coinage was the prerogative of kings, who prescribed the amount they were to receive as seigniorage. This was sometimes compensated for by replacing part of the gold or silver with base metal, resulting in debased coinage. In England all such charges were abolished in 1666. Because coins are now issued only as token money, they no longer need to possess a high intrinsic value, and low-standard silver or base-metal alloys are sufficient. The margin between the cost of producing a coin and its currency value is known as seigniorage.
■Seigniorage, also spelled seignorage or seigneurage, is the net revenue derived from the issuing of currency. Seigniorage derived from coins arises from the difference between the face value of a coin and the cost of producing, distributing and eventually retiring it from circulation. Seigniorage is an important source of revenue for some national banks. Seigniorage derived from notes is the difference between the interest earned on the government's securities portfolio, and the costs of producing and distributing bank notes.