Modernization of Banknotes is of Interest for Central Banks around the World
Created by Bernd Paulussen
Keeping cash available, clean, attractive and economically viable – against all odds!
Banknotes and cash payments in general have frequently been accused of being dirty, unsanitary and of posing a risk to public health. Therefore, it is not surprising that in times of the new Corona virus (SARS-CoV-2), this narrative appears again.
Major Central Banks have advised the public that the risk of transmission through banknotes is minimal (Deutsche Bundesbank), while others have urged retailers to continue accepting cash (Bank of Canada). The current data availability does not provide a consistent picture of the situation and Central Banks around the world follow different directions, but we can be certain that a modern banknote has no significant impact on a viral person-to-person transmission. The fact that the virus survives best on non-porous materials, such as plastic or stainless steel, means that debit or credit card terminals or PIN pads could transmit the virus as well or are even more likely to do so than banknotes.
Modern banknotes are highly sophisticated, dirt-repellent, stain-resistant and can prevent the transmission of germs. Therefore, a continuous modernization of banknote families is essential, not only to support and protect public health, but also to prevent counterfeiting through advanced security features.
New designs as well as upgrades in security and technology of banknote series come with many advantages, such as:
1.) Enhanced security linked with the introduction of new and improved security features for the public
Multifunction home-printers have become very affordable and technologically advanced. At the same time, large amounts are invested in R&D to provide more and more sophisticated and up-to-date security elements. Many of these security elements are geared to prevent home-copying and digital reproduction. This is achieved with the help of optically variable inks and variable security threads, stripes, patches and windows. We have been observing certain trends:
Lately we have seen a focus on wider and optically variable Security Threads featuring holographic designs, micro-mirrors and movement- and colour change effects. They are mostly partially embedded in the paper, as well as easy to detect and long-lasting (Motion®, Rapid®, Rapid® Detect by Crane and Rolling Star® and Galaxy® Threads by G+D). Furthermore, we see a trend towards optically variable magnetic ink features (SPARK® Live by SICPA), which are long lasting due to the used printing technique and provide movement- and colour changing effects in all directions. Their colour and optically variable effects can be adapted to and matched with colour change effects of other elements, such as threads, thus providing an even higher hurdle for the counterfeiter.
The Polish 500 Zloty banknote (2017) incorporates SICPA’s SPARK® Live optically variable ink feature in the shape of a soldier’s helmet shown on the front of the banknote, along with a matching Louisenthal’s RollingStar®-security thread.
2.) Improved machine readability and automatic counterfeit authentication
Central Banks strive to shorten the cash cycle by outsourcing banknote processing to the private sector. One of the most efficient ways to shorten the cash cycle are Recycle-ATMs, which collect and dispense banknotes relying on authentication by the equipment. Best in class machine-readable elements allow the use of such ATMs while preventing fraud and protecting the consumer. When planning a design- and/or security upgrade or a completely new family of banknotes, it is extremely important to consider the integration of modern machine-readable features, as certain specifications and conditions have to be met for an ideal detection and authentication by the various machines in use.
3.) Improving substrates and varnishing, in order to enhance the durability and quality of cash during circulation
Better, cleaner substrates and varnishes improve durability, help to reduce costs for reprinting and make banknotes more attractive for the public. This is especially important for the circulated transaction- and ATM-denominations and among renewed concerns related to germs and the perception that banknotes are unsanitary. While some manufacturers are focusing on R&D concerning better varnishes, others promote so-called advanced hybrid-solutions, which combine polymer and cotton layers.
4.) Keeping banknotes and coins visible for the public through strong advertisement campaigns
New and upgraded banknotes allow Central Banks to showcase modernized designs and improved security elements. Social media are nowadays of utmost importance to spread the news. They are also a popular means of gathering intelligence on how well a new series has been received by the public.
To keep banknotes safe, clean, appealing and up-to-date, Central Banks have to work harder nowadays. Technology advancements keep coming rapidly, machine readability is more important than ever, and counterfeiters have constantly improving and more affordable technology at hand.
The wide range of substrates, security features and design options can seem challenging. The same applies for considerations to take, when replacing an old with a new banknote series, as for example deciding on suppliers, design options, substrates, security elements, quantities to print per denomination, replacement time plans and repatriation logistics for the old family and many other factors.
Independent advice and guidance either for parts of or for the entire process can be invaluable. Cash InfraPro is available to accompany Central Banks to ensure that an upgrade or introduction of a new series is well planned, smooth, risk-free and ensures the desired results.
Sources: Bank for International Settlements, Deutsche Bundesbank, Bank of Canada, National Bank of Poland