[mistercow]

It's not centralized (according to their site). The value of held money just decays. The money doesn't go anywhere; it just disappears.

[Ygg2]

    >  Q: You said that Freicoin is decentralized. But the   Foundation makes it centralized!
    > A: You are right. But we have no other solution. Initial coins should be distributed to the society.

From FAQ, they say its centralized.

[maaku]

No. There is a one-time issuance of currency to get the money out there. Of that, 20% goes to the miners over the next 3 years, and 80% is distributed through community-vetted grant and prize proposals.

Of the demurrage however, it is perpetually destroyed and recycled through the miners.