Paper Money

Paper or plastic for world’s bank notes?

In an essay in a recent issue of “Central Banking,” Crane Currency, exclusive provider of currency paper to the Bureau of Engraving and Printing, touts its traditional paper, as opposed to polymer, for use in bank notes.

Image courtesy of Crane Currency.

Considering that Crane Currency has long been the exclusive supplier of the cotton-linen substrate used for United States paper money, it should be no surprise that the company favors that material over polymer.

The case for it was reinforced in an essay by Tod Niedeck, the company’s corporate marketing director in the September issue of Central Banking, also posted on the firm’s website. “Sustainability: A Hallmark of Cash,” touts, among other factors, the environmental advantage paper has over polymer during a note’s entire lifetime.

According to the report, 90% or more of the world’s bank notes are still printed on plant-based paper, and of the world’s economies that make up the Group of 20, only three have switched from paper to plastic.

In the United States alone, modern technologies and improved sorting have resulted in a tripling of the average circulation life of currency. The most heavily used denomination, the $1 note, has seen its life go from less than two years in the early 1990s to more than six years today. The Federal Reserve says the $100 bill, the world’s most popular paper bank note, now lasts more than 22 years.

The author adds that as the sustainability of paper money keeps improving, the environmental impact of cash alternatives is increasingly being looked at. Cryptocurrencies, due to the infrastructure they require, have a huge energy and environmental impact.

Compared to physical cash, all forms of electronic payment are more vulnerable to threats involving attacks on the IT infrastructure, electricity grid and security systems, according to the writer. In fact, he says, “In the defense and security field, no discussion of asymmetric warfare is complete without an analysis of the vulnerability of electronic systems.”

The essay claims that there is also a difference when a bank note reaches the end of its life and must be destroyed. The most secure bank note papers still rely on converting cotton fibers and plant-based textile waste into paper money that will decompose at the end of its life. Plastics, including polymer bank notes, end up either in a landfill or a smoke-belching incinerator, the essay states.

The presentation also detailed a little known connection between United States currency and Levi Strauss & Co. jeans. Up until about the 1990s, clippings from the production of the company’s denim were used by Crane in the production of its paper for the Bureau of Engraving and Printing. When spandex, a petrochemical, was added to the fabric to make jeans softer and more stretchy, it was discovered that the fabric was no longer suitable for currency. Just as with polymer bank notes today, off those scraps now go to the landfill, the essay states.

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