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# False Coiners and Seignorage

## Definition

The relationship between seignorage levels and counterfeiting incentives, where excessive seignorage creates profitable opportunities for counterfeiters by increasing the gap between bullion value and coin value. Appropriate seignorage levels can deter counterfeiting while generating government revenue.

## Source Chapter

Book IV, Chapter 6

## Context

Smith explains how seignorage levels must be carefully calibrated to balance revenue generation against counterfeiting risks. He uses the French example to show how moderate seignorage can be effective without encouraging the dangerous practice of counterfeiting.

## Economic Domain

Regulation

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