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# Debasement of Currency

## Definition

The deliberate reduction of the precious metal content in coins by rulers and sovereign states, allowing them to pay debts and fulfill obligations with less actual value while maintaining the same nominal value, defrauding creditors.

## Source Chapter

Book I, Chapter 4

## Context

Smith condemns this practice as an abuse of trust that systematically reduces the real value of currency over time, benefiting debtors at the expense of creditors and undermining the stability of commercial transactions.

## Economic Domain

Regulation

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