A time-related charge on money. It acts in a manner similar to a rental fee, which increases the longer it is held onto. For example, a 5% annual demurrage charge on $100 incurs a $5 fee, leaving a remainder of $95. The demurrage feature wields two profound effects, namely: It promotes a currency’s circulation as a trading device; and it encourages long-term thinking.
« Back to Glossary IndexBy: Arman Abdul Rahman
