Mark Robertshaw is walking around a printing plant in Wigton, England, about 10 miles from the Scottish border, with a wad of money. He lays out a Mexican 50, a Canadian 20, an Australian 5, and a fiver from the U.K. Unlike euros or U.S. dollars, these notes have a slight sheen and the feeling of wax paper. Thats because they entered the 10 -story plant as popcorn-size kernels of plastic.
Robertshaw is the chief executive officer of Innovia, the worlds resulting maker of plastic money. If that sounds like faint praisesuch bills account for only 3 percent of the worlds moneytheres plenty of reason to believe Innovia will become a bigger force in the $1.3 billion bank note industry. The 5 note builds the U.K. the most recent of about 30 countries to start changing toward plastic money, a more durable and protected alternative to the cotton in your Andrew Jacksons. Of the 50 billion-plus plastic notes now in circulation, Innovia built more than 99 percentage. There is a received wisdom out there that cash is disappearing, Robertshaw tells. Statistics dont subsistence that.
The number of bank notes in circulation grows by about 3 percent a year. Making the bills is a lot more technological than it was under the Tang or Song dynasties more than a millennium ago, or in the 13 th century, when explorer Marco Polo first brought Asias cotton money back to Europe.( Before that, currencies tended toward metals, shells, and salt .) Materials have to resist rips and stains, as well as incorporate ever-more-complex security measures to discourage forgers.
Theres a lot of science behind bank notes that people likely dont appreciate is there, tells Victoria Cleland, the chief cashier at the Bank of England. Before awarding Innovia the contract for the U.K.s plastic pounds, her squad expend more than five years studying potential materials for the new notes, examining whether, for example, holograms verifying a bills authenticity could be easily incorporated into a specific polymer. The U.K. set the first of 440 million plastic 5 notes into circulation in September; it will introduce a 10 bill in June made by Innovia. The company is bidding on the contract for the 20 note to follow.
Innovia has come a long way from its start attaining cellophane in the 1930 s and a midcentury expansion into cigarette packaging and shampoo bottle labels, which the company still builds. It added bank notes to its portfolio in the 1980 s, when Australias central bank was looking for bills that could better withstand the hot Down Under. Now they account for about one-third of the companys 380 million ($ 468 million) in annual revenue, Robertshaw says.
Plastic bills expense a few pennies each to make, about twice the cost of paper, but they last five times as long, according to Robertshaw. They can go through your washing machine, he tells. You can dip them in your wine. YouTube videos demonstrate the new 5 notes being used as a needle to play a vinyl record; others have shown that flame will melt them. We dont assert they are indestructible, Robertshaw says.
On the 10 th floor of the sweltering Wigton factory, Innovias team starts the assembly process by melting small beads of plastic in a 482 F furnace. By blowing in air, the machinery creates a bubble large enough to fit a couple of people inside, stretching out the plastic into a thin film. Rollers then smooth and stretch the material to 65 times its original length. Holograms and other security features are printed onto the plastic along with special inks, and the plastic is cut into 60 -bill sheets. Innovia then sends the sheets to bank note maker De La Rue, which adds the bills designs( the Queen, Winston Churchill ).
Innovias plastic carries a unique chemical signature, so a keychain-size scanner used by retailers and banks can identify if a bill is real. While no hard currency is fake-proof, the goal is to make forgery tough enough to be unappealing, tells De La Rue designer Steve Pond. Canadas government tells since it endeavoured to plastic money, its considered counterfeiting drop-off from 400 bills per million to 1 per million.
Cleland tells the Bank of England preferred Innovia after trying to counterfeit the bills. It was much more difficult in terms of the raw material needed, the printing machinery you would need, and the time that it took, she tells. Since the U.K. introduced the bill, several central bank have reached out to her to learn more about the production process.
The priority should be eradicating some money entirely, tells Kenneth Rogoff, former chief economist for the World Bank. In a new book, The Curse of Cash , Rogoff highlights the fact that central bank should remove large-denomination bills from the system: Theyre mainly used for crime and tax avoidance. A significant share of the demand for money comes from the underground economy and is almost completely because of its anonymity, he says.
Rogoff predicts that future cash registers will include scanners that log purchases with plastic bills, blending elements of digital and physical currencies. Robertshaw tells the technology exists to track their traveling. Thats the kind of technology that may help combat crime, but it would surely unsettle privacy advocates.
The Bank of England is among those studying ways to introduce a government-backed digital currency, like a bitcoin issued by the central bank. For now, Cleland tells, its a long way off. Polymer is in the street much earlier.
The bottom line : The U.K. has joined the ranks of countries with plastic currencygood news for Innovia, which controls 99 percentage of the market . ( Updated to correct De La Rue designer’s name in seventh paragraph .)