In the past
Money changers took their cut from the exchange rate.
The price is not always what is written on the surface.
How much am I paying? Who is taking it, and where?
Profit from money exchange, seigniorage from recoinage, and coin clipping → Transaction fees and profits from balance management.
Hidden Fees in 3 Minutes
1See it
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In the past
The government profited from recoinage by changing the metal content of coins.
In the past
People would also shave the edges off coins.
Today
There's a fee at each step of a payment.
Today
Profits from investing your deposited balance also become someone's cut.
What's similar
Each cut is small. When they add up, it's hard for the payer to notice.
A useful tip
Calculate the yearly cost yourself: rate × frequency × time period.
A useful tip
If something is 'free,' find out what you're paying with instead.
A word of caution
Recoinage was forced, but you can choose your fees. Don't treat them the same.
2What would you do?
You found an app that offers 'free money transfers.' Can you say you aren't paying anything at all?
Pick one
It's free, so I'm not paying anything.
When something is labeled 'free,' you might be paying instead with the investment profits on your balance, your data, or your time.
I'll look for what I'm paying with.
That's the right way to think about it. You look for whether you're paying with the investment profits on your balance, your data, or your time.
There has always been a cut taken wherever money is exchanged, moved, or deposited. Who takes the cut, and where it's taken from, changes over time.
3Read more
Fees
Representative Historical Scenarios
- Banco and BankruptcyOverview: the world Italy the 14th century
- Imabashi in OsakaJapan The realm of three coinages from 1628
- Kuramae in Asakusa, EdoJapan Famine and the smashing of houses 1789
- EdoJapan The century of recoinage 1695
- ClippingOverview: the world A history of false money the Middle Ages – the early modern age
Contemporary Financial Scenarios
Situations from the book where this theme appears. We present a comparison with past situations for each case.
The balance on a transit card: whose liability is it?
8-01 / Digital Present, Tokyo, Act on Settlement of Funds
- Similarities
- The form in which value issued by a specific issuer circulates like money within a limited scope is the same as with han-satsu or private notes from shops.
- Differences
- It is recorded electronically, and the law provides a framework for its definition and protection. The limitation of its scope is determined not by law, but by the issuer's contract.
- Applications
- When you see a balance, ask three things: who is the issuer, where can it be used, and to what extent is it protected?
- Limitations
- The standard deposit amount (cabinet order) and the details of protection methods other than deposits (security contracts, trusts) are not covered. The accounting treatment should also be confirmed separately.
What does "settlement" extinguish?
1-05 / Modern Money Present. Tokyo. The three means of settlement.
- Similarities
- The nature of cash, where the transaction "ends the moment it is handed over," is the same as handing over a silver coin.
- Differences
- Deposit settlement occurs on a third party's books, and its finality is determined by the system (e.g., Real-Time Gross Settlement, DVP).
- Applications
- Distinguish between "paid" and "settled." A scheduled transfer is not a settlement.
- Limitations
- The properties mentioned are an explanation of the Japanese system; the treatment of payment finality differs by country and settlement system.
Reading the backing — opening the disclosure page
8-05 / Digital August 31, 2026 Boston USDC Reserves
- Similarities
- The method of gaining trust by disclosing backing is the same concept as when banks began publishing their balance sheets.
- Differences
- The backing consists of short-term government bonds and repos, with weekly disclosures and monthly attestations, making the frequency an order of magnitude higher.
- Applications
- When viewing the disclosure page, read the categories, frequency, and attesting party, and treat the amounts as the values for that day.
- Limitations
- This stop is based on the self-disclosure of one company. It does not evaluate other issuers or the difference between attestation and audit.
How to compare past and present
Similarities
Places that exchange, move, or hold money take a cut. Each cut may seem small, but the accumulated amount is difficult for the payer to see.
Differences
Seigniorage from recoinage is taken by the state from the coin's content, profit from exchange is taken by merchants from the exchange rate, and modern fees are taken by businesses at each stage of a transaction. The entity that takes and the point of collection differ.
Applications
Multiply the rate, frequency, and period to calculate the annual cost for yourself. Where it says "free," look for what you are paying with instead (e.g., profits from your balance, your data, your time).
Limitations
When equating "recoinage = modern fees," remember that recoinage was mandatory, while fees are a choice. The cost of not choosing an available option should be counted separately from the system's cost.
To go beyond "they are similar," we also describe the differences, what can be applied today, and where past examples should not be applied to the present (limitations).
Price
After purchase, the full courses, the illustrated books, every country’s story and the numismatics examination are open to you.
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