THE Bank of England is not known for presenting its research in shopping centres. Usually, its number-crunchers swap ideas with their wonkish counterparts in dingy rooms in Washington, DC or Frankfurt. But its latest project is different: for three years the Bank of England has been studying its banknotes. Now it wants to persuade the public that they should be made out of plastic.
Of Britain’s cash, broadly defined, only about 3% has any physical form (the rest is digital). Three billion notes are in circulation, with a face value of about £58 billion ($92 billion). On September 10th Chris Salmon, the bank’s chief cashier, said it wants to stop making certain notes from paper (actually derived from cotton and linen) and, from 2016, use polymer for the £5 and £10 notes.
In 2012, the Bank withdrew from circulation some 720,000 fake notes, with a face value of £13m. Australia, which uses polymer notes, has lower counterfeit rates than Britain.Over 20 countries already use such notes. They cost more to make but are better value (saving £100m, the Bank reckons). Paper money gets dirty and damaged quickly. The much-used £5 note typically lasts only nine months. Polymer notes can last six times as long. They can even go in the washing machine. They are also harder to forge. Mr Salmon proudly showed off a transparent window on a prototype tenner, which makes such notes hard to counterfeit. Merchants can more easily spot the absence of security features on clean notes.
Banks will need to change their cash machines. But the big worry is the public’s reaction to the smooth, springy feel of the new notes. Hence the shopping centres: the Old Lady will make over 30 presentations in such locations. Just don’t expect any giveaways.