Proceeds of The System
In some instances, the demurrage fee is charged by some sort of central authority, and results in the collection of currency into a large pool. What is done with this pool varies widely among both historical and proposed systems. In some cases, it is used to pay administrative costs of the system. If the currency in question is run by the government, the demurrage fee can be used as tax revenue; this parallels a proposed tax on the holding of bank deposits proposed by some economists. Other systems have been proposed which involve redistributing this pool equally to all users of the currency.
Mutual credit systems charging demurrage do not end up with a pool of money, as they simply cancel the demurrages on both positive and negative balances against each other.
Read more about this topic: Demurrage (currency)
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