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Paper or Plastic?

4/17/2012

 Polymer plastic money, just a fad or the best counterfeit protection technology available today?

In an effort to combat counterfeiting and reduce costs over time, more countries are producing polymer banknotes.  Canada is just the latest in a long line of countries that have either fully adapted to polymer notes, or simply created a commemorative note or single denomination in polymer.

Polymer banknotes were originally developed by the Reserve Bank of Australia, Commonwealth Scientific and Industrial Research Organization and The University of Melbourne and were first issued as currency in Australia in 1988.   This type of banknote was created to incorporate many security features not available to paper banknotes, making counterfeiting much more difficult.  These new notes made of plastic polymers also greatly enhanced durability of the notes.

These “plastic” notes are made from a non-fibrous and non-porous polymer which compared to paper banknotes are more durable, harder to tear, more resistant to folding, more resistant to soil, waterproof (and washing machine proof), easier to machine process, and are shreddable and recyclable at the end of their useful lives.

Of course, there are also disadvantages to adopting the polymer banknotes.  They are harder to fold and when creased become difficult to bring back to an original flattened state.  The notes are more slippery, which makes them harder to count by hand.  Polymer notes cost more to produce in the short-term, which could be a drawback for developing countries.  And, even though the notes are recyclable, some less developed countries may not have the facilities to recycle them – and when they burn they pollute the air.

As of 2011, at least seven countries have converted fully to polymer banknotes: Australia, Bermuda, Brunei, New Zealand, Papua New Guinea, Romania and Vietnam

While Australia was the earliest to adopt polymer notes to its full range of denominations, some of the more recent adoptees include:

Canada, having released the savvy 100 dollar note and 50 dollar note in recent months, the remaining denominations will be circulated within the next year.

Guatemala has issued a 5 quetzal note in 2011 to follow the 1 quetzal note that was issued as a polymer note in 2007.

Chile started in 2009 by introducing their new 5000 peso note and have recently added the 2000 and 1000 peso note to the series.

Cost Rica has very recently redesigned the 2000 and 1000 colonnes notes of which the 1000 was developed in the polymer.

As more countries become advocates of the polymer notes, there are also advances being made in paper banknotes and it is now possible to make “hybrid notes” – paper notes with a transparent window.  Tom Hockenhull, curator of the Modern Money exhibition at the British Museum, says that the security gap between paper and plastic notes is closing. 

“Paper is much more secure than it used to be and the new British pound 50 note, for example, has features that are extremely hard to counterfeit.”

Meanwhile counterfeiters are making progress with polymer.  “Polymer is very hard to counterfeit, but it hasn’t stopped people trying: good imitations do appear from time to time, “Mr. Hockenhull says.