Making banknotes is expensive and complex. So whilst some countries, like America, still print their own notes, many governments have begun to outsource their production.
Yet in an unexpected turn of events, one of the world’s most successful currency printers is not a commercial company – it’s the Australian Government.
A tidy profit
Hailed as a game-changer, Australia’s high-tech plastic banknote was developed for use in the 1980s.
Since then, the Government has benefited from near total domination over the polymer bills market; printing and distrusting their wares to over 20 countries like Chile, Romania, Thailand and New Zealand.
This unusual source of revenue nets the Australian Government a few million dollars each year – yet their monopoly may soon be coming to an end.
Whilst the UK’s banknote printer DeLaRue originally lobbied against the notes (over concern about the loss of revenue if fewer notes were needed), they soon began to take heed of the development.
As Chief Executive Tim Cobbold noted, the polymer provides “a new platform from which to provide security.”
To this end, the company developed its own version, and is now filling orders for countries including Fiji.
The development is leading many to predict that Australia’s dominance of the polymer note market will slowly come to a close.
About two dozen countries have adopted polymer bills, including Canada, Fiji, Mexico and Singapore, and many others have contemplated the move, including India and the U.K. – where the switch would mark the end of over 300 years of paper currency.
The demand for the bills stems from three main factors: Their durability, security and environmental friendliness.
The notes are more durable as they can withstand much of the common dirt, water and heat bills are exposed to. And whilst they are initially more expensive to print, this durability makes them last longer – which saves money in the long run.
For example, the UK’s oft-used five pound note should last up to four times longer in a polymer version than its paper counterpart.
Sophisticated security features can also be built into the notes, which makes them resistant to counterfeit.
Lastly, from an environmental aspect, the polymer bills are more easily recycled than “paper” notes – which are actually made primarily from cotton which takes large amounts of pesticides and water to create.
It is not all good news though. Common pitfalls being pointed out include the bills “slipperiness” – which makes them harder to fold and count.
In addition, whilst they are certainly recyclable, this process takes special facilities which some less developed countries may not have.
This is making the world’s notoriously cautious central banks pause in their decision to adopt the notes, as they strive to ensure any new currency continues to have value.
Many are simply waiting for others to make the move before they follow the progression themselves.