This week, the Bank of Canada announced that they will be converting their banknotes from paper to using the polymer substrate. The Bank of Canada will begin to issue C$100 notes in November 2011. A C$50 note will be issued in March 2012 and the remaining denominations (C$20, C$10, and C$5) will be issued in 2013.
The polymer “paper” was developed by the Reserve Bank of Australia to enhance the durability of the notes and to incorporate security features not possible with paper or rag-based paper. RBA has been distributing polymer notes since 1992. While the polymer substrate costs little more and the production is only marginally more expensive, the benefit will come from the reduction in counterfeiting and the durability of the note. Polymer will last three-to-six times longer than rag-based paper.
On April 21, 2010, the government unveiled the new $100 note design. The new note, still made of rag-based paper, would incorporate new security features such as a different use of color shifting ink and a 3-D security ribbon. The note would continue to use security features first introduced in U.S. currency in 1996. The new notes were scheduled to be issued on February 10, 2011.
However, on October 1, 2010, the Federal Reserve announced that the issue of the redesigned $100 note will be delayed. It has been reported that the notes are folding during the printing process making a number of them unusable. It was further reported that the BEP is working with its paper provider, Crane & Co., to fix the issue.
I had asked a BEP Media Relations representative about the status of the new notes. I was told there was no additional information available.
With the new $100 note having printing problems, why has the BEP not looked into using the polymer substrate for U.S. currency? Why does the Federal Reserve, BEP, and Secret Service cling to 19th and 20th century printing technologies in the 21st century? Or is this a matter of “not invented here” to avoid alleged controversy by using a something invented by a foreign central bank?
It may be time for the Federal Reserve, BEP, and Secret Service to face reality that the old ways of doing things are not working and to look to the future for something better.