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Britain to Join Ranks of Nations Using Plastic Currency
Paper or Plastic: Britain Joining Currency Trend
(about 9 hours later)
OTTAWA — The trouble with paper money, aside from the fact that we spend it too easily and governments often print too much of it, is that it wears out too fast — especially in balmy places with high humidity.
OTTAWA — It took only 900 years, but paper money is fading away.
Bills made of plastic, on the other hand, do not have that problem and can be manufactured with sophisticated security features to vex counterfeiters.
As a new technology, plastic bank notes, becomes more popular around the world, people will have to get used to money that is slipperier but less grimy and harder to fold into origami cranes but more likely to survive washing machines.
Polymer bank notes, as they are called, are catching on around the world, despite skepticism from consumers wherever they are introduced.
The decline of one of the world’s greatest inventions gained momentum on Wednesday when Britain announced that the British pound, a reserve currency that has been printed on cotton-based paper for 300 years, will be made from plastic. Britain is the latest nation to replace paper bills — starting with the £5 and £10 notes — with plastic ones. Canada and Australia have already made the switch, as have about two dozen other countries.
In what is the biggest boost to date, the Bank of England announced on Wednesday that it would adopt polymer notes. The Bank of England said that the new notes, in 5- and 10-pound denominations, would be harder to counterfeit.
Others, although not the United States, are expected to follow suit. The reason is simple enough: Plastic — or polymer, as it is called — holds up better than paper. It is also a lot harder to counterfeit.
Last month, Canada abandoned the last of its paper currency in favor of plastic money, following the example of Australia and about two dozen other countries.
Governments worry about such things, with good reason. But that is not what people who must now use polymer bills are concerned about. When Canada began introducing polymer notes in 2011, people grumbled about their slipperiness and their foldability. They thought the plastic bills would melt on hot radiators or car dashboards. Some people convinced themselves that the notes were infused with a maple syrup scent, a notion that the Bank of Canada dismisses.
Christopher Jeffery, editor of Central Banking Publications, a trade magazine based in London, said that there seemed to be no stopping the move to polymer. And that will only accelerate when Britain’s “fivers” and other notes join in beginning in 2016.
“One of the more improbable urban myths was that the intense heat in Canada caused the notes to melt,” Mark Carney, governor of the Bank of England and previously governor of the Bank of Canada, said at a news conference on Wednesday announcing the notes. “I can assure you that wasn’t the case. Nor has the intense cold in Canada caused them to malfunction.”
“Pending some kind of catastrophe, it’s going to be more of a continued trend toward using polymer,” Mr. Jeffery said.
If a car interior got hot enough to melt a bill — that would be 284 degrees Fahrenheit, or 140 degrees Celsius — the car’s interior plastics would begin to sag like a Salvador Dalí watch. Polymer bills can withstand temperatures as low as minus 103 Fahrenheit (minus 75 Celsius), said Richard Wall, the director of currency at the Bank of Canada.
The United States remains a notable holdout. Officials at the Bureau of Engraving and Printing have said that they have looked into switching to plastic, but a spokeswoman said there were no current discussions.
In an unscientific test using a household oven set to 280 degrees Fahrenheit, a new Canadian 5-dollar note did not melt. But after eight minutes, it started to smell bad, shrink substantially and curl markedly. Its translucent security features also became opaque blobs.
The growing acceptance of polymer notes has lured the largest printer of bank notes in the world, the British company De La Rue, into the business. After four years of development, its first polymer bills were printed this year for Fiji.
Now that Canada has completed the transition, the complaints are fewer. But not everyone already using the new money is enthusiastic. Here in Ottawa, about a mile south of the future new home of Canadian Bank Note Company, which prints the country’s bills, is Di Rienzo Grocery and Deli, where about 300 sandwiches are snapped up each day by a steady stream of customers for 5 Canadian dollars apiece — cash only.
In the last year, Mauritius and Morocco have also started to use plastic bills. Polymer has been particularly popular in the tropics, because paper bills wear out faster in high humidity. The Mexican central bank estimates that although polymer notes cost about twice as much to make, they last about 3.5 times longer.
In the two years since the Bank of Canada first introduced polymer bills, Paolo Di Rienzo, the owner of the impossibly crowded and chaotic deli, has developed a long list of grievances. He says the bills stick to one another. Yet he also says their slippery surface allows them to slip easily, unnoticed, out of pockets. The light, springy bills sometimes leap out of the cash register, according to Mr. Di Rienzo. And, he says, polymer does not really fold.
Richard Wall, the director of currency at the Bank of Canada, dismissed claims that polymer bills melt after being left inside cars on hot summer days or become brittle and snap in extreme cold. He said temperatures that would melt the bills would also melt interior plastics in a car. Tests show that polymer bills can withstand temperatures as high as 284 degrees Fahrenheit and as low as minus 103.
(In an unscientific test using a household oven set to 280 degrees Fahrenheit, a new Canadian 5 dollar note did not melt. But after eight minutes, it started to smell bad, shrink substantially and curl markedly. Its translucent security features also became opaque blobs.
(Mr. Wall also dismissed a widely held belief in Canada that the new money was infused with a maple syrup scent.)
Blind people say they like the polymer money because embossed marks that help them identify denominations do not wear away.
One factor trumped everything when it came to Canada’s decision to use polymer. “It was all about improving the security of bank notes,” Mr. Wall said. “We had a fairly substantial level of counterfeiting in 2004.” Polymer currency was first introduced here, as 50 dollar and 100 dollar bills, in 2011.
While Canada had already incorporated various holographic security devices in its paper bills, polymer enabled more complex protection. The new Canadian bills have a transparent window that contains large, color-shifting images of Parliament buildings and a portrait of Queen Elizabeth, Canada’s formal head of state, or famous Canadian politicians. Small metallic details, including the note’s domination, also swirl around in the window. A circle of numbers appears in a second tiny window shaped like a maple leaf, the national symbol.
The success that Canada and other countries have had in warding off counterfeiters prompted the Bank of England to consider plastic currency, according to Victoria Cleland, the head of the bank’s notes division. “With bank notes, you want to understand how things have worked in true-life testing,” Ms. Cleland said.
The Bank of England made its decision on polymer notes after a long process in which the public was able to view and feel the bills during events at several malls and universities. The bank said 87 percent of the people it talked to were supportive of the move.
The first polymer note in England — a 5 pound bill — will be released in 2016 and will feature Winston Churchill. A year later, Jane Austen will appear on a 10 pound note.
Not everyone already using the new money is enthusiastic. About a mile south of the future new home of Canadian Bank Note Company, which prints the country’s bills, is Di Rienzo Grocery and Deli, where about 300 sandwiches are snapped up each day by a steady stream of customers for 5 dollars apiece — cash only.
In the two years since the Bank of Canada first introduced polymer bills, Paolo Di Rienzo, the owner of the impossibly crowded and slightly chaotic deli, has developed a long list of grievances. He says the bills stick to one another. Yet he also says their slippery surface allows them to slip easily, unnoticed, out of pockets. The light, springy bills sometimes leap out of the cash register, according to Mr. Di Rienzo. And, he says, polymer does not really fold.
“You have to really watch when they give you the money and when you give the money back,” Mr. Di Rienzo said. “The other ones were much better, the regular ones.”
“You have to really watch when they give you the money and when you give the money back,” Mr. Di Rienzo said. “The other ones were much better, the regular ones.”
Overhearing Mr. Di Rienzo while waiting for a sandwich, Domenico Nicolo, a taxi driver, pulled out a 100 dollar polymer note and began rubbing what he said was its excessively slippery surface. “A lot of people complain about them,” Mr. Nicolo said of his customers, adding that he now checks money much more carefully for bills that have stuck together.
Overhearing Mr. Di Rienzo while waiting for a sandwich, Domenico Nicolo, a taxi driver, pulled out a 100-dollar polymer note and began rubbing what he said was its excessively slippery surface. “A lot of people complain about them,” Mr. Nicolo said of his customers. He now checks much more carefully for bills that have stuck together.
The only improvement Mr. Nicolo could cite was polymer’s ability to survive accidental trips through washing machines.
The only good thing Mr. Nicolo could say about polymer bills was that they survived accidental trips through washing machines.
Complaints aside, Canada completed its shift to polymer notes in November with the release of 5 and 10 dollar bills, the country’s lowest paper money denominations.
One factor trumped everything when it came to Canada’s decision to use polymer. “It was all about improving the security of bank notes,” Mr. Wall said. “We had a fairly substantial level of counterfeiting in 2004.”
The shift away from paper globally has been in the works for decades. When Australia experienced a rash of counterfeiting of a new 10 dollar note in the 1960s, its central bank joined with a government science agency to begin developing new technology to deter forgers.
While Canada had already incorporated various holographic security devices in its paper bills, polymer enabled more complex protection. The new Canadian bills have a transparent window that contains large, color-shifting images of Parliament buildings and a portrait of Queen Elizabeth, Canada’s formal head of state, or famous Canadian politicians. Small metallic details, including the note’s denomination, also swirl around in the window. A circle of numbers appears in a second tiny window shaped like a maple leaf, the national symbol.
It took more 20 years for Australia to release its first plastic note – displaying an Aborigine in body paint – and its production process was, and remains, anything but simple. To create a perfectly smooth surface, plastic is first blown into a giant bubble, two layers of which are bonded into a flat, transparent substrate. That is coated with a bonding surface for ink.
It was the success Canada and other countries have had in warding off counterfeiters that prompted the Bank of England to consider plastic currency, according to Victoria Cleland, the head of the bank’s notes division. “With bank notes, you want to understand how things have worked in true-life testing,” Ms. Cleland said.
Ed Kozma, the Canada country manager for the MEI Group, a multinational manufacturer of bill-reading devices for vending machines, based in Malvern, Pa., said that Canada’s decision to put a transparent band across its bills created some initial engineering challenges. The polymer bills would sometimes slip in the rollers and motors used to pull them into readers made by competitors, he said. Mr. Kozma estimated that upgrades cost as much as $250 per vending machine. A.T.M.'s required new cash-handling mechanisms.
The Bank of England made its decision on polymer notes after a long process in which the public was able to view and feel the bills during events at several malls and universities. The bank said 87 percent of the people it talked to supported the move.
The inherent conservatism of central bankers made the plastic money concept slow to catch on, according to Owen W. Linzmayer, editor of Banknote News. “They don’t want to switch until it’s been proven elsewhere,” he said.
The first polymer note in Britain, a “fiver,” will be released in 2016 and will feature Winston Churchill. A year later, Jane Austen will appear on a £10 note.
But Mr. Linzmayer added that in most countries the bills had stood up and proved to be technologically superior. He acknowledged that the duller colors and surface of the polymer notes had made them less popular with the public in many countries.
Mr. Carney reassured the British public that the queen’s visage would also appear on both notes. “Our polymer notes will combine the best of progress and tradition.”
“There’s fantastic science behind this,” Mr. Linzmayer said, “but ultimately it comes down to what the public wants, and the feel of the paper.”
He also said it would make the British pound decidedly more presentable. “We have a bit of an issue in this country with the tattiness of notes over time. You think about the £5 note: Quite often you get one you want to get rid of it as quickly as possible.”
“Which is a good thing from an economic perspective, to some extent,” he said with a laugh.
