Currency Debasement

Definition ∞ Currency Debasement refers to the reduction in the purchasing power of a currency, typically caused by an increase in its supply relative to economic output. This process can result from government policies such as excessive money printing or devaluation. It leads to higher prices for goods and services. Debasement diminishes the value of savings and income denominated in that currency.
Context ∞ The state of Currency Debasement is a persistent concern in global economics, particularly in nations experiencing high inflation or financial instability. Key debates address the role of central banks in managing monetary supply and the potential for digital assets to serve as an alternative store of value. A critical future development involves the ongoing macroeconomic responses to inflation and how these influence public confidence in sovereign currencies versus decentralized alternatives.