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The tipping point for polymer banknotes

May 19, 2014 by Brendan Burge

Is it possible that we have reached the tipping point for polymer banknotes? A recent article in the Central Banking Journal suggests that, with the adoption of polymer in Canada and the recent announcement that the Bank of England will issue 5 pound and 10 pound banknotes on polymer substrate, we might have the beginnings of a tidal wave of adoption by other countries — in particular, those of the G8.

Apparently the U.S. and Japan are notable holdouts at this time. These two countries’ reluctance to introduce polymer notwithstanding, there are significant benefits to making a change, including:

• environmental friendliness;
• increased banknote lifespan; and
• reduced counterfeiting.

However, as noted in the Central Banking Journal article, there might be regional reasons for not switching to polymer.

Apparently Nigeria is considering a move back to paper, primarily for reasons of ink durability. The fact that they have not yet done so might indicate that substrate manufacturers and printers are addressing this unique challenge with accelerated research and development.

Whatever the outcome of decisions — pro or con — by Nigeria and other early adopter countries, we conclude wholeheartedly that we are at the tipping point for polymer banknotes.

A further word on counterfeiting

No matter the substrate chosen for new banknotes, it must never be overlooked that the war with counterfeiters will be endless. It is a war of one-upmanship.

When countries introduce new banknotes, enterprising criminals will inevitably find a way to convincingly reproduce them. In support of this fact, we offer an interesting insight into the efforts of a masterful counterfeiter, who undertook the challenge of reproducing the new U.S. $100 note with technology, tools and information readily available online.

It would seem that the Internet might be the single most effective weapon in the counterfeiter’s arsenal of “catch-up” weapons. We invite you to watch the YouTube video at this link to learn how easy it can be for counterfeiters to compete for share of the public purse.

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