Technorati Tags: payments
The Treasury is the major beneficiary of the arcane system of notes and coins that we use in this country. The note issuing department of the Bank of England, the most profitable nationalised industry Britain has ever seen, collects money from banks and in return gives them bits of paper and metal worth much less (a ten pound note costs considerably less than ten pounds to produce). It uses the surplus to buy Gilts from the Treasury and gives the interest earned on these instruments back to the government. So if digital money ever does displace notes and coins, the Chancellor will either have to up income tax by a couple of pence in the pound to make up this lost seigniorage or nationalise digital money and sell it to commercial banks instead of notes and coins.
I took a pointless picture to add to my growing (well, two) collection of monetary landmarks for the blog…
My opinions are my own (I think) and are presented solely in my capacity as an interested member of the general public. [posted with ecto]