 Under the rules governing the monetary operations of major central banks (including the Federal Reserve), seigniorage on banknotes is the interest payments received by central banks on the total amount of currency issued.This usually takes the form of interest payments on treasury bonds purchased by central banks, putting more dollars into circulation.If the currency is collected, or is otherwise taken permanently out of circulation, the currency is never returned to the central bank; the issuer of the currency keeps the seigniorage profit by not having to buy back worn-out currency at face value.