In Canada they pride themselves on doing things differently from their
neighbours the United States. Now the Commonwealth country has also
demonstrated to the eurozone, with its struggling currency, how to firm
up the economy – literally – with a new form of plastic money.
Because from this week, Canadians will be using 100 dollar bills made
from thin sheets of polymer. Following a trend set by fellow
Commonwealth nation Australia in the 1980s, Canada has unveiled its
first plastic note since the introduction of paper money in the 1800s.
It’s the first stage in a process that will eventually see all
Canadian bank notes turn plastic by 2013 and it is the most drastic
change to the country’s money supply since the introduction of the
rainbow- colored money in the 1960s.
And it goes against the popular belief that cash is outdated, as Bank
of Canada Governor Mark Carney points out: “Reports of the death of
cash are greatly exaggerated. Our research shows that cash is used for
more than half of all shopping transactions.”
The smooth and shiny new $100 bill, which is virtually impossible to
rip, will be followed by the polymer $50 bill in March and the $20, $10
and $5 bills will arrive in another two years’ time and the old notes
will be gradually phased out.
The move follows the rise in counterfeiting that swept across the country a decade ago.
Banks have been testing the new notes in their machines for months,
said Martine Warren, the Bank of Canada’s scientific adviser.
“We’ve been working with the market for over two years to make sure
that ATMs and all banknote-processing equipment are ready for these
polymer notes,” Ms Warren said. “We distributed test notes and advance
designs of the genuine notes to machine manufacturers far earlier than
we have in the past to make sure that the circulation system is ready
for these polymer notes.”
Generally, though, the banking industry has been working on ways to make cash payments obsolete.
Some of Canada’s largest financial institutions and credit-card
issuers have joined forces with phone companies to develop payment
systems that will allow consumers to pay digitally from their phones at
the cash register, similar to using a debit card.
But cash is still the most commonly accepted form of payment in Canada.
“Canadians, as a consequence, need a currency that they can trust,” Mr Carney said.
Canada is one of about 30 countries to have ditched paper-style bills.
While the new plastic notes will cost about 19 cents to produce,
roughly double what the paper notes of past series cost, they will last
at least 2.5 times longer, Mr Carney said.
Unlike the cotton-paper-based notes, the polymer banknotes have a
see-through area that is not possible with ink on paper, which the
central bank believes will be the most difficult aspect to counterfeit.
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