Hubbry Logo
BanknoteBanknoteMain
Open search
Banknote
Community hub
Banknote
logo
8 pages, 0 posts
0 subscribers
Be the first to start a discussion here.
Be the first to start a discussion here.
Banknote
Banknote
Banknote
View on Wikipedia
from Wikipedia

Part of a series on
Numismatics
the study of currency
Currency
Circulating currencies
Local currencies
Fictional currencies
Proposed currencies
History of money
Historical currencies
Medieval currencies
Production
Collection
Coin collecting
Notaphily
Exonumia
Scripophily
Securities
Securities
Markets
Bonds by coupon
Bonds by issuer
Equities (stocks)
Investment funds
Structured finance
Derivatives

A banknote or bank note[1] – also called a bill (North American English) or simply a note – is a type of paper money that is made and distributed ("issued") by a bank of issue, payable to the bearer on demand. Banknotes were originally issued by commercial banks, which were legally required to redeem the notes for legal tender (usually gold or silver coin) when presented to the chief cashier of the originating bank. These commercial banknotes only traded at face value in the market served by the issuing bank.[2] Commercial banknotes have primarily been replaced by national banknotes issued by central banks or monetary authorities.

By extension, the word "banknote" is sometimes used (including by collectors) to refer more generally to paper money, but in a strict sense notes that have not been issued by banks, e.g. government notes, are not banknotes.[3][better source needed]

National banknotes are often, but not always, legal tender, meaning that courts of law are required to recognize them as satisfactory payment of money debts.[4] Historically, banks sought to ensure that they could always pay customers in coins when they presented banknotes for payment. This practice of "backing" notes with something of substance is the basis for the history of central banks backing their currencies in gold or silver. Today, most national currencies have no backing in precious metals or commodities and have value only by fiat. With the exception of non-circulating high-value or precious metal issues, coins are used for lower valued monetary units, while banknotes are used for higher values.

History

[edit]
Main articles: History of money and Paper money

Issue of banknotes

[edit]

Materials used for banknotes

[edit]

Vending machines and banknotes

[edit]

Destruction

[edit]
A 5 euro note that was repaired with plastic tape after being torn in half
Further information on the New York University scientific research project: Dirty Money Project

A banknote is removed from circulation because of everyday wear and tear from its handling. Banknotes are passed through a banknote sorting machine to assess their authenticity and fitness for circulation, or may be classified unfit for circulation if they are worn, dirty, soiled, damaged, mutilated or torn. Unfit notes are returned to the central bank for secure online destruction by high-speed banknote sorting machines using a cross-cut shredder device similar to a paper shredder with security level P-5 (pieces smaller than 30 mm2) according to the standard DIN 66399–2. This small size decomposes a banknote into typically more than 500 tiny pieces and rules out reconstruction like a jigsaw puzzle because the shreds from many banknotes are commingled.

A subsequent briquettor compresses shredded paper material into a small cylindrical or rectangular form for disposal (e.g. landfill or burning).[28] Before the 1990s, unfit banknotes were destroyed by incineration, with a higher risk of manipulations.

When a Federal Reserve Bank of the United States receives a cash deposit from a commercial bank or another financial institution, it checks the individual notes to determine whether they are fit for future circulation.[29] About one-third of the notes that the Fed receives are unfit, and the Fed destroys them. US dollar banknotes last an average of more than five years.[30]

Contaminated banknotes are also decommissioned and removed from circulation, primarily to prevent the spread of diseases. A Canadian government report indicates:

Types of contaminants include: notes found on a corpse, stagnant water, contaminated by human or animal body fluids such as urine, feces, vomit, infectious blood, fine hazardous powders from detonated explosives, dye pack and/or drugs...[31]

In the US, the nickname "Fed Shreds" refers to paper money which has been shredded after becoming unfit for circulation. Although these shredded banknotes are generally landfilled, they are sometimes sold or given away in small bags as souvenirs or as briquettes.[32] Since 2012, the Federal Reserve Bank of St. Louis has also donated shredded banknotes to local farms for use in composting.[33]

Polymer banknotes may be shredded and then melted down and recycled to form plastic products like building components, plumbing fittings, or compost bins.[34]

Intelligent banknote neutralisation systems

[edit]

Intelligent banknote neutralisation systems (IBNS) are security systems which render banknotes unusable by marking them permanently as stolen with a degradation agent. Marked (stained) banknotes cannot be brought back into circulation easily and can be linked to the crime scene. Today's most used degradation agent is a special security ink which cannot be removed from the banknote easily and not without destroying the banknote itself, but other agents also exist. Today IBNSs are used to protect banknotes in automated teller machines, retail machines, and during cash-in-transit operations.

Dynamic Intelligent Currency Encryption

[edit]

Dynamic Intelligent Currency Encryption (DICE) is a security technology introduced in 2014 by the British company EDAQS that devalues banknotes remotely that are illegal or have been stolen. The technology is based on identifiable banknotes—that could be an RFID chip or a barcode—and connects to a digital security system to verify the validity of the banknote. The company claims that the banknotes are unforgeable and contribute to solving cash-related problems as well as fighting crime and terrorism. On a related note, governments consider the DICE benefits to be a driving force behind the progressive abolition of cash because they cover and resolve almost all cash-related issues.[35]

Confiscation and asset forfeiture

[edit]

In the United States, there are many laws that allow the confiscation of cash and other assets from the bearer if there is suspicion that the money came from an illegal activity.[36] Because a significant amount of U.S. currency contains traces of cocaine and other illegal drugs, it is not uncommon for innocent people searched at airports or stopped for traffic violations to have cash in their possession sniffed by dogs for drugs and then have the cash seized because the dog smelled drugs on the money. It is then up to the owner of the money to prove where the cash came from at his own expense. Many people simply forfeit the money.[37] In 1994, the United States Court of Appeals, Ninth Circuit, held in the case of United States of America v. U.S. Currency, $30,060.00 (39 F.3d 1039 63 USLW 2351, No. 92-55919) that the widespread presence of illegal substances on paper currency in the Los Angeles area created a situation where the reaction of a drug-sniffing dog would not create probable cause for civil forfeiture.[38]

See also

[edit]

References

[edit]

Bibliography

[edit]
[edit]
Revisions and contributorsEdit on WikipediaRead on Wikipedia

Banknote

View on Grokipedia
from Grokipedia

A banknote is a issued by a or authorized institution, payable to the bearer on demand without interest, and functioning as for payments alongside coins. Banknotes originated in during the in the 11th century as jiaozi, paper certificates backed by deposits of iron coins to address shortages of metallic currency, marking the first widespread use of . In , the first true banknotes appeared in in 1661, issued by the Stockholms Banco, though they faced challenges like over-issuance leading to collapse; the began issuing notes in the late 1690s, promising payment in gold or silver, which helped establish modern fiat currency systems. Contemporary banknotes are produced using specialized paper made from and fibers or, in some countries, durable substrates to enhance longevity and resistance to wear. They incorporate advanced security features such as watermarks, security threads, holograms, and color-shifting inks to deter counterfeiting, with production involving intaglio printing and other techniques managed by central banks or their contractors. Banknotes facilitate efficient exchange in economies by reducing the need to transport heavy coins, though their value derives ultimately from public trust in the issuing authority rather than intrinsic worth, enabling central banks to influence through issuance volumes. While universally accepted as for debt settlement in their jurisdictions, private entities are not obligated to accept them beyond minimal amounts in some legal frameworks.

Definition and Fundamental Characteristics

A banknote is a issued by an authorized bank or , obligating the issuer to pay the bearer a specified sum of on demand without . Legally, it qualifies as a , transferable by mere delivery to the holder, who is entitled to its upon presentation. This structure originated from early banking practices where notes represented claims on deposits, evolving into standardized under governmental oversight to prevent counterfeiting and ensure uniformity. In most jurisdictions, banknotes hold the status of , meaning they must be accepted by creditors for discharge of public and private debts at their nominal value. For example, under , [Federal Reserve](/page/Federal Reserve) notes and other circulating notes serve as for all debts, a designation codified in 31 U.S.C. § 5103 and upheld by federal regardless of issuance date or design changes. This legal enforceability underpins their role, distinguishing them from mere promises by imposing acceptance obligations, though private parties may negotiate alternatives for transactions. Functionally, banknotes operate as a facilitating exchange without the need for endorsement or identification, enabling efficient circulation as paper-based alongside coins. Their stems from portability, divisibility into denominations, and durability for repeated handling, serving primarily as a in economies where they represent —value derived from issuer credibility and legal mandate rather than intrinsic commodity backing. Central banks maintain functionality through monopolistic issuance controls, quality standards, and destruction of unfit notes to preserve and prevent .

Physical and Design Features

Banknotes are typically rectangular sheets, with dimensions varying by issuing authority but often standardized within a currency series for ease of handling and vending machine compatibility. Notes measure 156.1 mm in length by 66.3 mm in width, a size adopted in to reduce production costs from larger prior formats. increase in length with denomination, from 120 mm for the €5 note to 160 mm for the €500 note, while maintaining a consistent 62-68 mm width to aid visual differentiation. These sizes balance portability, durability, and aesthetic proportionality, with many modern notes optimized around 133 mm by 73 mm for printing efficiency on standard presses. Physically, traditional banknotes use a crisp, durable substrate such as a cotton-linen blend, providing a distinctive texture from that raises elements like portraits for tactile verification. substrates, adopted by over 40 countries including since 1988 and the in 2016, offer enhanced longevity—up to 2.5 times that of paper—with a flexible, low-lint feel resistant to folding damage. Notes weigh approximately 1 gram each, with thickness around 0.11 mm, ensuring stackability in automated systems. Design elements emphasize through motifs like historical figures, landmarks, and symbols, printed on sides with denomination clearly indicated in numerals and script. Colors are denomination-specific—e.g., green for US dollars, multicolored gradients for euros—to facilitate quick recognition, often incorporating architectural or cultural themes to evoke heritage without political controversy. Serial numbers, unique to each note, aid tracking and , while fine-line patterns and engravings deter reproduction via standard printers. Security features integrate seamlessly into design for public and machine verification, categorized by accessibility: Level 1 for unaided checks like watermarks—light-transmissive images formed by paper density variations—and security threads embedded strips visible under light or UV. Tilt-activated elements include color-shifting inks and 3D ribbons, as in the US $100 note's blue band with moving bells and numerals. Advanced holograms, used in over 97 currencies, provide kinetic effects like shifting images, while and intaglio relief resist scanning and photocopying. These multilayered defenses, combining overt with covert technologies, evolve via collaborations to counter counterfeiting rates below 0.01% in high-security currencies like the .

Historical Development

Ancient and Early Modern Origins

The earliest precursors to banknotes appeared in during the (618–907 CE), where merchants issued private promissory notes or "" (feiqian) as lightweight certificates redeemable for coin deposits, facilitating amid copper shortages and transport difficulties. These were not yet full-fledged but functioned as transferable credit instruments backed by stored metals. True emerged in the (960–1279 CE), with notes first printed around 997 CE in province by 16 wealthy merchant families, who deposited copper coins in associations and issued paper certificates in denominations from 1 to 10 guan (each guan equaling 1,000 coins) to simplify bulk transactions. By 1023–1024 CE, the imperial government monopolized issuance through state-supervised bureaus, standardizing designs with mulberry paper, , and anti-counterfeiting seals, while decreeing death penalties for forgeries; these notes circulated nationwide by the mid-11th century, backed initially by reserves but later leading to overissuance and inflation. The Song system's success stemmed from China's advanced technology—perfected since Cai Lun's innovations circa 105 CE—and the practical need to replace cumbersome coinage weighing up to 50 pounds per guan, enabling economic expansion in commerce and taxation. Paper currency persisted under the Mongol (1271–1368 CE), where Kublai Khan's administration issued chao notes in 1260 CE, enforced as with severe punishments for using coins instead, though unchecked printing fueled by the , eroding trust and contributing to dynastic collapse. No comparable systems existed in ancient Western civilizations, where reliance on metal coins, leather tallies, or clay tokens prevailed; claims of precursors like Roman or Carthaginian notes lack archaeological or textual substantiation beyond informal memos. In , banknotes evolved from medieval bills of exchange—transferable debt instruments used by Italian bankers since the 13th century for —but printed, bearer-style notes appeared first in with Stockholms Banco, founded in 1657 by Johan Palmstruch. In 1661, the bank issued kreditivsedlar (credit notes) in denominations from 10 to 1,000 copper dalers, promising redemption in heavy copper plates or coins, which gained popularity for convenience but collapsed in 1667–1668 due to overissuance exceeding reserves by a factor of 10, triggering a credit crisis and the bank's nationalization as , the world's oldest . This failure highlighted risks of fiat-like issuance without metallic backing, yet spurred adoption elsewhere: the (1609) provided deposit receipts akin to proto-notes, while the began issuing circulating promissory notes in 1694, backed by and , establishing a model for state-monopolized paper currency. Early modern notes thus represented a causal shift from to credit-based systems, driven by trade volume and metallurgical constraints, though prone to speculative bubbles absent strict reserve disciplines.

European Expansion and Standardization

The issuance of banknotes in commenced in 1661 with Stockholms Banco, a chartered by the Swedish state under Johan Palmstruch, which produced the continent's first circulating paper currency to address the impracticality of transporting heavy -based . These kreditivsedlar (credit notes) were denominated in daler silver or equivalents, initially redeemable in metal and bearing no , facilitating easier transactions amid 's -heavy . The notes gained rapid acceptance, but overissuance without sufficient metallic reserves led to depreciation and a banking , culminating in the bank's collapse by 1668 and a temporary ban on private note issuance in . This Swedish experiment, despite its failure due to unchecked credit expansion unsupported by real assets, demonstrated paper money's potential for economic convenience and influenced subsequent European adoptions, though with greater caution regarding convertibility. In England, the Bank of England—established in 1694 via royal charter to finance William III's war against France—began issuing promissory notes as receipts for gold and silver deposits, marking a more stable model backed by government credibility and fractional reserves. These early English notes, handwritten and payable to the bearer on demand in coin, circulated in denominations starting at £20, evolving to include partial printing by 1725 to standardize formats and reduce forgery risks through copper-plate engraving techniques. By the early 18th century, banknote issuance expanded beyond state-chartered institutions to private banks, particularly in where over 20 banks issued competing notes convertible to specie, fostering competition but also periodic instability from overcirculation. attempted widespread adoption in 1716 under John Law's Banque Royale, which issued notes backed initially by land and shares in the Mississippi Company, but rapid monetary expansion to fund colonial ventures triggered and the scheme's collapse in 1720, reinforcing European wariness of unanchored paper currency. Similar ventures emerged in and the , often tied to trade companies, yet limited to specific regions due to persistent distrust rooted in convertibility failures. Standardization efforts in the focused on production and security to mitigate counterfeiting, with transitions from fully handwritten notes to fixed-denomination printed forms using intaglio methods for raised textures, as seen in practices by mid-century. Notes typically featured serial numbers, signatures, and watermarks, though lacking uniform sizing across issuers; single-sided designs predominated until bilateral advanced in the late 1700s. This period's expansions, averaging issuance growth tied to trade volumes—such as England's notes circulating at about 10% of metallic stock by 1750—laid groundwork for national monopolies, as repeated crises from private overissuance underscored the need for centralized control to maintain public confidence in redeemability.

19th-Century National Systems and Crises

![Five dollar banknote of Citizens Bank of Louisiana][float-right] In the early 19th century, many European nations and the relied on decentralized systems where provincial or state-chartered banks issued their own notes, leading to a proliferation of varieties that facilitated counterfeiting and eroded public confidence during economic downturns. To address these instabilities, governments increasingly centralized banknote issuance under national authorities, aiming for uniformity and backing by sovereign assets, though such systems often proved rigid in responding to demands. The exemplified this shift with the National Banking Acts of 1863 and 1864, signed into law by President on February 25, 1863, and amended the following year. These acts created federally chartered national banks authorized to issue uniform "National Bank Notes" secured by deposits of U.S. bonds with the Treasury, replacing the chaotic "" era under state laws that had produced over 10,000 distinct note types prone to bank failures. The Office of the Comptroller of the Currency (OCC) was established to charter banks, supervise operations, and manage note circulation, financing Civil War efforts while standardizing . Despite reducing note diversity, the system's dependence on bond-backed issuance created an inelastic supply, amplifying panics such as those in 1873—triggered by railroad overexpansion and European financial strains—and 1893, where widespread bank runs led to over 500 bank failures and a severe depression. In the , the Bank Charter Act of 1844, enacted under Prime Minister , curtailed provincial banknote issuance by granting the an effective monopoly in , limiting country banks to pre-existing fixed quotas of notes backed by securities. This reform responded to recurrent crises, including the panics of 1825 and 1837, where unchecked note expansion by joint-stock banks fueled speculative bubbles and suspensions of specie payments. The act separated the Bank's issue and banking departments to enforce discipline, though it faced suspensions during later strains like the 1847 and 1857 crises, highlighting tensions between restrictive rules and elastic credit needs. France's Banque de France, founded in 1800 under Napoleon Bonaparte, initiated national banknote production in June-July of that year with high-denomination issues of 500 and 1,000 francs, primarily for commercial use rather than everyday circulation. By the mid-19th century, following the 1848 Revolution—which prompted temporary note suspensions and revivals—the bank consolidated a monopoly on issuance, expanding to lower denominations and nationwide distribution amid industrialization. Crises like the 1870-1871 necessitated emergency measures, including regional "necessity notes" from affiliates, as the bank's Paris-centric operations strained under siege conditions, underscoring vulnerabilities in centralized yet geographically limited systems. These national frameworks mitigated some fragmentation risks but often intensified cyclical vulnerabilities, as fixed issuance rules clashed with fluctuating economic demands, paving the way for central banking innovations.

20th-Century Fiat Transition and Global Adoption

![US $100 Federal Reserve Note series of 1928][float-right] The witnessed the widespread shift of banknotes from redeemable claims on or silver to currencies, declared by government decree without commodity backing. This transition, driven by economic pressures including world wars and depressions, enabled central banks to expand supplies more flexibly but decoupled notes from fixed reserves. By mid-century, most developed economies had suspended convertibility, paving the way for global dominance. The process accelerated during the , as nations prioritized economic recovery over adherence to the gold standard. The suspended gold convertibility on September 21, 1931, devaluing the pound and issuing unbacked banknotes to stimulate exports and domestic activity. This move influenced others; including , Denmark, Norway, and abandoned the standard between September and October 1931. In the United States, President enacted on April 5, 1933, requiring citizens to surrender gold holdings, followed by congressional legislation on April 20, 1933, that nullified gold clauses in contracts and suspended dollar convertibility, transforming Federal Reserve Notes into instruments domestically. World War II further entrenched fiat systems, as governments financed deficits through note issuance without reserve constraints. The 1944 Bretton Woods Agreement temporarily restored a modified gold anchor by pegging currencies to the U.S. dollar, which remained convertible to at $35 per ounce, but this hybrid regime strained under U.S. balance-of-payments deficits. On August 15, 1971, President unilaterally ended dollar- convertibility—the "Nixon Shock"—forcing floating exchange rates and completing the transition for major currencies. Globally, the abandonment spread to developing nations post-decolonization, with central banks issuing sovereign banknotes replacing colonial or commodity-tied systems. By 1973, the collapse of fixed rates under Bretton Woods led to widespread adoption of managed floats, where banknotes circulated as backed solely by state faith and credit. This era saw banknote circulation surge; for instance, U.S. grew from $49 billion in 1971 to over $100 billion by 1980, reflecting fiat-enabled monetary expansion. Today, all national banknotes operate as , with over 180 currencies unpegged from gold.

Issuance Mechanisms

Central Bank Authority and Monopoly

Central banks hold the exclusive legal authority to issue banknotes designated as within their jurisdictions, a monopoly typically codified in national statutes to maintain control over the and prevent inflationary overissuance by private entities. This prerogative enables central banks to regulate the supply of circulating , thereby influencing broader objectives such as and , as unregulated private issuance historically contributed to financial instability through excessive note proliferation. The monopoly extends to banknotes, which derive value from decree rather than backing, distinguishing them from earlier private promissory notes redeemable in specie. In the United Kingdom, the Bank Charter Act of 1844 granted the a monopoly on note issuance in by imposing strict limits on private banks' note circulation, requiring them to maintain fixed reserves of Bank of England notes or , effectively curtailing competitive issuance to avert banking crises like those in 1825 and 1837. Similarly, the United States of 1913 empowered the System to issue Federal Reserve notes under Section 16, establishing it as the sole issuer of this form of national currency to provide an elastic responsive to economic demands while eliminating fragmented private banknote systems prevalent before 1863. These frameworks reflect a causal progression from decentralized —prone to runs and uneven redemption—to centralized authority, where the central bank acts as and guarantor of note . Exceptions to this monopoly persist in limited jurisdictions, primarily where commercial banks issue notes fully collateralized by central bank liabilities, ensuring no net expansion of the . In and , authorized private banks such as the Royal Bank of Scotland continue to produce their own notes, backed 100% by holdings at the , a practice originating from pre-1844 tolerances but now subordinate to central oversight. In , private issuers like produce notes backed by equivalent securities from the , maintaining parity without independent monetary creation. Such arrangements, rare globally, underscore the monopoly's robustness elsewhere, as evidenced by laws in over 90% of surveyed s explicitly reserving note issuance to the sovereign entity. Violations or encroachments, such as unauthorized digital replicas, are curtailed to preserve this authority amid emerging challenges like cryptocurrencies.

Historical Private and Competing Currencies

Private banknote issuance emerged prominently in Scotland following the establishment of the Bank of Scotland in 1695, which began circulating notes redeemable in specie to address coin shortages. Subsequent private banks, such as the Royal Bank of Scotland in 1727, joined in issuing competing denominations, often starting at £20 and later smaller values like £1, backed by gold reserves and regulated by market discipline rather than central authority. This system persisted with stability, as note-holders discounted or rejected unreliable issues, resulting in fewer failures compared to contemporaneous systems elsewhere; by the 18th century, Scottish private notes circulated widely without significant inflation or collapse. In the United States, private banks issued circulating notes from 1781 until 1935, initially without federal oversight, leading to diverse local currencies. The Free Banking Era (1837–1863), enacted in states following New York's 1838 model, permitted any chartered bank to issue notes backed by specified assets like state bonds, fostering competition but also risks. Over 2,500 state and private banks produced more than 30,000 note varieties between 1782 and 1866, traded at discounts reflecting issuer solvency, monitored by private "bank note detectors" and reporters that published reliability ratings. While proponents highlight entrepreneurial innovation and constraint via market , critics note elevated failure rates—up to 50% in some states—and periodic panics, such as the 1857 crisis, though empirical studies indicate lower overall instability than popularly assumed when adjusted for fraud detection. Elsewhere in , private issuance appeared sporadically; Sweden's commercial banks, starting with Skånska Privatbanken in , emitted notes until centralization under the Riksbank. In colonial and early America, while initial paper money comprised colony-issued bills of credit rather than private banknotes due to absent incorporated banks, post-independence private notes filled gaps amid specie . These systems declined with national banking acts—U.S. National Banking Act of 1863 imposed taxes on state notes, effectively favoring federal issues, culminating in the Federal Reserve's 1913 monopoly and 1935 prohibition on private notes. Historical private currencies demonstrated viability through redeemability and but faced challenges from asymmetric and redemption runs, informing modern debates on monetary .

Denominations, Production, and Distribution

Banknotes are issued in standardized denominations selected by central banks to optimize transaction efficiency, minimize production costs, and align with public demand patterns derived from and circulation statistics. Denominations typically progress in geometric or arithmetic series to facilitate change-making and higher-value exchanges, with lower values for everyday use and higher ones for bulk transactions. For example, the issues Federal Reserve Notes in seven denominations: $1, $2, $5, $10, $20, $50, and $100, reflecting historical stability and demand forecasts showing dominance of $20 and $100 notes in circulation volume. In the euro area, the oversees production of €5, €10, €20, €50, €100, €200, and €500 notes, though €500 issuance ceased in 2019 due to low usage and anti-crime measures, with remaining stock still . Central banks assess denomination needs annually via econometric models incorporating GDP growth, , cash velocity, and return rates of unfit notes, often retaining series unchanged for decades unless or digitization shifts demand significantly. Banknote production is a high-security operation conducted by central banks' in-house facilities or specialized contractors, emphasizing durability, authenticity features, and volume scalability. Quantities are forecasted collaboratively: for euros, national central banks (NCBs) and the ECB calculate needs to replace worn notes (about 20-30% annual return rate), accommodate seasonal peaks, and buffer against surges, allocating orders across 11 European printing works producing over 8 billion notes yearly as of recent data. The process begins with substrate preparation—75% cotton and 25% linen blend for U.S. notes for tensile strength—and proceeds through offset printing for color tints, intaglio for raised portraits and vignettes under 20 tons of pressure per sheet, and finishing with serial numbering, cutting into 50-subject sheets (or 16-subject for some), and quality inspection via optical character recognition to cull defects at rates below 1%. Security elements like watermarks, security threads, and color-shifting inks are integrated during printing, with polymer substrates increasingly adopted for longevity in currencies like the British pound (£5, £10, £20, £50). Distribution mechanisms ensure equitable access while controlling money supply, with central banks acting as wholesalers to depository institutions rather than direct public issuers. In the U.S., the delivers finished notes to vaults, from which 12 Reserve Banks fulfill orders from commercial banks via armored transport or electronic credits, processing over 40 billion notes annually to match net demand after verifying returned fit notes. NCBs similarly stockpile logistical reserves for routine redistribution and strategic stocks for disruptions, transferring notes inter-NCB via ECB-coordinated to balance regional surpluses—e.g., higher €50 demand in —while institutions access via settlement accounts. This tiered system minimizes idle inventory costs, with central banks monitoring circulation via returned note data to adjust future production and demonetize unfit currency, which comprises 5-10% of annual volume depending on handling wear.

Materials and Manufacturing

Substrate Materials: Paper vs. Polymer

Traditional banknotes primarily utilize paper substrates made from and rag fibers, which provide tactile quality, ink absorption, and resistance to folding compared to wood-based papers. These materials, often 75-100% content, endure circulation for 6 to 18 months on average, with lower denominations wearing faster due to higher handling volumes. manifests as accumulation, tears, and breakdown, necessitating frequent replacement and contributing to production costs. Polymer substrates, consisting of biaxially oriented (BOPP) film with an opacifying layer and print-receptive coating, were first commercially issued by in 1988 as a $10 commemorative note to combat counterfeiting vulnerabilities in . By 1996, fully converted its series, becoming the first nation to do so; as of 2025, approximately 76 countries, including , the , and , have adopted for at least some denominations. Polymer notes resist tearing, , and dirt adhesion, extending average lifespan to 2.5-4 years—up to four times longer than paper equivalents—due to their non-fibrous structure and .
AspectPaper SubstratesPolymer Substrates
Durability6-18 months circulation; prone to tearing, soiling, and abrasion2.5-4 years; waterproof, tear-resistant, withstands temperatures from -40°C to 50°C
Production CostLower per-note initial cost (e.g., rag processing)1.5-2 times higher per note, offset by 40-60% fewer replacements over lifecycle
SecurityRelies on watermarks, fibers; vulnerable to high-quality reproductionsEnables transparent windows, holograms; reduced counterfeiting rates (e.g., Australia's pass rate dropped post-adoption)
Environmental ImpactHigh replacement frequency increases resource use; soiled notes shredded, limiting Lower overall footprint (e.g., 30% less in per lifecycle analysis) from longevity, though production emits more upfront; recyclable into pellets for non-currency plastics
Despite advantages, polymer notes exhibit drawbacks such as slipperiness during high-speed counting and potential opacity degradation over time, prompting hybrid explorations in some issuers. Empirical data from adopters like confirm net economic benefits, with inflation-adjusted savings exceeding AUD 1 billion from 1996-2021 via reduced printing volumes, though initial transition costs and public familiarity challenges delayed uptake elsewhere. Central bank analyses consistently favor for high-circulation economies, prioritizing verifiable lifecycle metrics over unsubstantiated environmental critiques.

Printing Techniques and Durability

Banknotes employ specialized printing techniques to integrate security features while enhancing resistance to wear from circulation. Intaglio printing, the cornerstone of modern banknote production, involves incising designs into metal plates and forcing ink into the recesses under , resulting in raised, tactile ink layers that provide both visual depth and a distinctive "feel" for . This method is applied to portraits, vignettes, and borders, using durable inks that withstand repeated handling. Offset lithography complements intaglio by printing fine-line backgrounds, guilloche patterns, and color gradients in multiple layers, enabling precise registration for anti-counterfeiting complexity. These techniques are sequenced in production: for instance, the applies intaglio to the reverse side in green ink, allows three days for drying, followed by offset and intaglio on the obverse. Durability in banknotes arises from the interplay of methods, , and post-print coatings that mitigate soiling, abrasion, and tearing during use. Intaglio's thick deposits and specialized varnishes form protective barriers, while optically variable (OVI) integrated via intaglio shift colors under tilt, maintaining visibility despite soil accumulation. Circulation simulators replicate real-world stress through cycles of folding, crumpling, soiling with dirt analogs, and mechanical abrasion to assess retention of optical and tactile properties. Empirical lifespans vary by denomination and substrate; in , a $1 note averages 7.2 years, $20 notes 11.1 years, and $100 notes longer due to less frequent handling, reflecting lower turnover rates for higher values. data indicate lower denominations endure about four years on average, with higher ones lasting longer from reduced transactions. Advanced processes, such as those by the Banque de France's EverFit series, incorporate surface protections post- to extend lifespan in harsh environments, tested via accelerated aging protocols. These methods prioritize inks and finishes resistant to chemical exposure and mechanical fatigue, ensuring notes remain functional until shredding, typically after 3–15 years depending on national data. Overall, techniques not only deter through complexity but causally extend usability by embedding resilient layers that delay degradation from empirical wear factors like friction and contaminants.

Environmental and Cost Considerations

Polymer banknotes, typically made from biaxially oriented , exhibit a lower overall environmental footprint compared to traditional cotton- substrates when assessed across their full lifecycle, primarily due to their extended reducing replacement frequency. Lifecycle analyses conducted by central banks, such as the Bank of Canada's , indicate that polymer notes consume approximately 30 percent less total than paper notes, despite higher initial demands, as fewer notes need production and distribution over time. Similarly, the Bank of England's found polymer substrates superior in categories like and . Cotton-paper banknotes, derived from non-wood fibers, require significant water and agricultural inputs for production, contributing to higher upstream environmental burdens, whereas polymer's petroleum-based origin raises concerns over dependency, though its recyclability—via processes like chemical or through —mitigates end-of-life impacts. A 2017 study by the reported that a £5 polymer note has a 16 percent lower emissions profile than its equivalent, factoring in usage and disposal phases. In , a comparative study of high-durability versus polymer showed the latter reducing acidification and potentials by virtue of lower circulation turnover. Polymer notes' resistance to wear also curtails volume; unfit paper notes are typically shredded and landfilled or , generating approximately 1 kg of briquetted per 1,000 notes, while polymer variants enable higher recovery rates in systems. From a cost perspective, polymer substrates incur 20-50 percent higher per-unit production expenses than due to specialized and processes, but their lifespan—often 2 to 4 times longer, averaging 2.5 to 7.5 years versus 6-18 months for —yields net savings through reduced and demands. The Reserve Bank of Australia's cost-benefit analysis of its polymer series, introduced progressively from , demonstrated breakeven within 5-6 years, with ongoing annual savings from diminished replacement volumes equating to millions in avoided expenditures. Lifecycle modeling confirms that in high-circulation scenarios, polymer's durability offsets initial premiums, lowering total ownership costs by up to 30 percent for denominations in frequent use.

Security Features and Counterfeiting Challenges

Evolution of Anti-Counterfeiting Measures

Early anti-counterfeiting measures for banknotes relied on paper-making techniques and printing methods that were difficult to replicate without specialized equipment. Watermarks, created by varying paper thickness during production, were first applied to banknotes in 1661 by Stockholms Banco, featuring the word "BANCO" in a scroll design visible when held to light. Intaglio printing, involving incised plates to produce raised ink with fine details and tactile relief, became prominent for currency around 1840 through advancements by the American Banknote Company, which employed teams of engravers to create intricate portraits and guilloche patterns resistant to photographic reproduction. In the late 19th and early 20th centuries, features like serial numbering and complex vignettes were standardized to aid verification, with the U.S. Secret Service established in 1865 partly to combat widespread counterfeiting that affected up to one-third of circulating notes by the 1860s. Security threads, thin metallic or plastic strips embedded in paper, originated from a 1867 U.S. patent by Crane & Co. but saw practical deployment in 1940 on Bank of England notes to thwart Nazi Operation Bernhard forgeries. Post-World War II innovations incorporated optically variable elements; the first hologram on a circulating banknote appeared in on Australian notes via a diffractive device, followed by Kinegram foils on notes. —text too small for casual reproduction—and fluorescent inks detectable under UV light were introduced in U.S. notes starting with Series 1990 $100 bills, extending to other denominations by 1993. Color-shifting inks and embedded threads with denomination-specific glows further evolved in the , as seen in redesigned U.S. $100 notes of 1996. Into the , multilayered features like see-through registers and latent images combined with digital verification tools have proliferated, with polymer substrates introduced in in 1988 enhancing durability and enabling transparent windows with embedded holograms. These measures reflect a progression from mechanical replication barriers to multifaceted, machine-readable defenses, driven by advancing counterfeiter technologies like high-resolution scanning.

Historical and Modern Counterfeiting Incidents

During the , counterfeiting of currency proliferated, with estimates indicating that up to one-third of circulating notes in the United States were fake by the 1860s, exacerbating economic instability and prompting the creation of the U.S. Secret Service in 1865 specifically to combat it. Union operatives also produced counterfeit Confederate notes to undermine the Southern economy, with printer Samuel Upham issuing over 1.5 million imitation Confederate bills marketed as "fac-similes for the curious," which inadvertently flooded markets and contributed to in the Confederacy, where note values depreciated by over 9,000% by war's end. In 1925, Portuguese fraudster orchestrated the Portuguese Bank Note Crisis by forging official letters to induce British printer Waterlow & Sons to produce 200,000 genuine 500-escudo notes—equivalent to about 0.88% of 's gross domestic product—without Bank of Portugal authorization, leading to a , bank runs, and temporary suspension of note convertibility until the forgeries were detected through serial number discrepancies. The largest state-sponsored counterfeiting effort occurred during with Nazi Germany's , launched in 1942 at , where skilled Jewish prisoners forged approximately £134 million in British pounds (equivalent to billions today) using seized plates and intaglio presses to fund , bribe officials, and potentially destabilize the UK economy, though most notes were dumped in Austrian lakes rather than circulated widely. In modern times, "superdollars"—exceptionally high-quality U.S. $100 bills featuring advanced intaglio printing, cotton-linen blend paper, and security strips—first surfaced in 1989 and have been attributed by U.S. authorities to North Korea's state operations, with seizures totaling over 350,000 notes by the early 2000s and ongoing detections linked to DPRK diplomats passing them for foreign currency to evade sanctions. U.S. Secret Service data show counterfeit detections rising post-2020, with over $500 million seized in fiscal year 2020 alone and $102 million passed in 2023, fueled by accessible digital printers and networks, though representing less than 0.01% of genuine . Canadian criminal Frank Bourassa produced and laundered $250 million in fake U.S. $20 bills between 2009 and 2012 using commercial presses and bleach-washed notes, marking one of the largest individual operations before his 2012 arrest.

Detection Technologies and Economic Impacts

Detection technologies for banknotes encompass a range of manual and automated methods designed to verify authenticity by examining features such as watermarks, security threads, inks, and substrates. Manual tools include counterfeit detection pens, which apply an iodine-based ink that reacts differently to the content in genuine cotton-linen versus wood-pulp-based counterfeits, turning black on fakes but yellow on real notes. (UV) lamps reveal fluorescent elements absent or mismatched in s, while basic visual inspections check for raised intaglio printing and . These low-cost methods are widely used in retail but have limitations against sophisticated fakes. Automated detection relies on high-speed sorters and validators equipped with multisensor arrays, including visible light, , UV, and magnetic sensors to analyze signatures, , and thread conductivity. For instance, commercial systems from employ tailored sensors to authenticate features like color-shifting inks and holograms, achieving near-real-time verification in banking and vending applications. The (ECB) maintains a list of validated authentication devices tested for , emphasizing combined optical and machine-readable checks to minimize false positives. Advanced techniques, such as short-wave (SWIR) , enable subsurface analysis to detect anomalies in substrates or embedded fibers, with studies showing efficacy in distinguishing high-fidelity counterfeits. Covert taggants, like those in Authentix's Jewel system, provide machine-readable markers invisible to the , integrated into central bank sorters for bulk processing. Economic impacts of counterfeiting include direct losses from passed fakes, which represent seigniorage theft and consumer harm, alongside like eroded public confidence and enforcement expenses. In the United States, recorded $102 million in counterfeit currency passed during 2023, though seizures totaled $21 million, indicating active interdiction but ongoing circulation risks. For the , 467,000 counterfeit notes were withdrawn in 2023 and 554,000 in 2024, primarily €20 and €50 denominations, yet these constitute a minuscule —less than 0.002%—of the 28 billion genuine notes in circulation, suggesting low relative to total monetary stock. Globally, counterfeiting undermines by facilitating illicit , but direct losses pale compared to other frauds like scams, with U.S. estimates framing it as a minor threat to overall financial integrity. Detection investments yield net benefits by reducing these losses and preserving trust, though they impose upfront costs for central banks in R&D and equipment deployment. Enhanced technologies have correlated with declining counterfeit rates post-euro redesigns, as seen in ECB data showing stabilized low incidences after 2019 series introductions. However, persistent low-quality fakes, often produced via consumer printers, highlight that while advanced detection protects high-volume handlers, public education remains crucial to mitigate retail-level impacts. Broader enforcement, including international cooperation via , addresses organized operations that amplify economic distortions through ties.

Economic Functions and Effects

Role in Transactions and Monetary Velocity

Banknotes function as a tangible in economic transactions, enabling direct payments without reliance on electronic infrastructure, which is particularly valuable for small-value exchanges, informal sectors, and populations lacking access to banking or digital tools. In the area, accounted for 52% of point-of-sale transactions by number in 2023, though this share declined from 59% in 2022, reflecting persistent use despite digital alternatives. Globally, usage stood at approximately 80% of 2019 levels as of 2024, underscoring its role in maintaining transactional continuity in regions with uneven digital adoption or during disruptions like power outages. This physical form supports anonymity and finality in transfers, reducing intermediation costs compared to card-based systems, where fees can exceed 2% per transaction in some markets. In the United States, comprised 14% of payments by number in 2024, trailing (35%) and debit cards (30%) but remaining integral for low-value and in-person dealings, where it avoids network dependencies. Empirical indicate that banknotes facilitate higher transaction speeds in cash-intensive economies; for instance, in developing markets, cash circulates more rapidly for daily necessities, supporting economic activity where creation is limited. However, their role varies by context: in high-trust, digitized settings like , cash transactions fell below 1% of retail volume by 2023, shifting reliance to traceable digital flows. Banknotes influence monetary —the ratio of nominal GDP to , capturing how frequently changes hands—by enabling repeated use in sequential transactions within a period. of narrow aggregates like M1, which include circulating banknotes, tends to exceed that of broader measures due to their transactional primacy; for example, U.S. M1 averaged around 5-7 pre-2008 but declined amid post-financial , partly as physical was stored rather than spent. In , banknote circulation slowed between 2010 and 2022 despite rising issuance volumes, attributed to increased domestic and cross-border flows, where exported notes yield zero domestic . Empirical models show that a 10% drop, potentially from reduced turnover via digital substitutes, correlates with subdued inflationary pressure in transaction-cost sensitive economies like . Conversely, in -dominant informal sectors, banknotes sustain high by bypassing banking frictions, though overall declines in use globally—coupled with digital 's potential to lower holding costs—may compress aggregate by encouraging retention over recirculation.

Contributions to Inflation and Seigniorage

Seigniorage from banknotes arises as the profit earned by s from the difference between the of issued and its low production and distribution costs, typically amounting to a of a cent per note for high denominations. This revenue accrues when banks acquire banknotes from the at , effectively providing interest-free funding that the invests in interest-bearing assets, with net earnings remitted to the after expenses. In fiscal year 2022, for example, the reported seigniorage earnings exceeding CAD 2 billion, primarily from banknote circulation minus operational costs. Such income represents a form of non-distortionary taxation, as it leverages the monopoly on issuance without direct levies, though it diminishes as a share of GDP in advanced economies with low cash usage. In the United States, the 's issuance of Federal Reserve Notes generates through similar mechanics, with the producing notes at costs averaging about 5.6 cents per $100 bill in recent years, yielding near-total as profit upon circulation. These contribute to the Fed's remittances to the U.S. , which totaled $109 billion in 2021 before shifting to losses amid higher interest rates. Globally, from physical remains significant in emerging markets with higher reliance, where it can fund up to 1-2% of GDP in some cases, contrasting with fractional contributions in digital-heavy systems. Banknotes contribute to inflation when their issuance expands the excessively relative to economic output, embodying the where growth outpaces real , eroding . Physical currency forms the currency component of the (M0), which influences broader aggregates like through bank lending; rapid banknote printing to monetize deficits injects that, if unsterilized, accelerates and price rises. In modern economies, this effect is moderated by and policy tools, but historical over-issuance demonstrates direct causality: Weimar Germany's printed marks to cover and deficits, driving monthly to 29,500% by as surged without gains. Extreme cases underscore banknotes' inflationary potential through unchecked pursuit, often termed an "inflation tax" on cash holders. In , from 2006 onward, the Reserve Bank printed trillions in Zimbabwean dollars to finance expenditures, culminating in of 79.6 billion percent monthly by November 2008, rendering banknotes worthless and prompting abandonment of the currency. Hungary's post-World War II pengő issuance similarly escalated, achieving the record monthly rate of 41.9 quadrillion percent in 1946 due to wartime and reconstruction costs, before stabilization via the forint. These episodes reveal that while provides fiscal relief—equivalent to taxing holders proportionally to holdings—sustained abuse erodes confidence, accelerates velocity, and spirals into , as real collapses. Empirical analyses confirm that in high-inflation environments, maximization correlates with output drops of 10-20% due to distorted incentives and uncertainty.

Impacts on Financial Inclusion and Crises

Banknotes serve as a fundamental medium for in regions with limited banking infrastructure, particularly among populations who constitute approximately 75% of the poorest adults. In low- and middle-income countries, where formal account ownership remains below 50% in many areas, physical facilitates everyday transactions, remittances, and savings for individuals lacking access to digital or institutional . Empirical data from the World Bank's Global Findex database indicate that reliance persists in rural and informal economies, enabling economic participation without prerequisites like identification or , which often exclude marginalized groups. This accessibility contrasts with digital alternatives, which require reliable , , and devices—factors absent for over 1 billion people in developing regions. During financial crises, demand for banknotes surges as a hedge against institutional instability, reflecting a preference for tangible assets over deposits vulnerable to bank runs or digital disruptions. Historical evidence from the 2008 global financial crisis shows elevated currency withdrawals across major economies, driven by eroded confidence in banks and a flight to liquidity, with U.S. currency in circulation rising by about 10% in the immediate aftermath. Similarly, analyses of crises over the past three decades, including the Eurozone debt turmoil and the COVID-19 pandemic, reveal consistent increases in cash hoarding regardless of crisis type—financial, inflationary, or political—due to its role as a low-risk store of value and medium of exchange when electronic systems falter. In natural disasters or pandemics, cash enables immediate transactions amid power outages or network failures, underscoring its resilience. In episodes, however, banknotes exacerbate economic distress by necessitating rapid issuance of ever-higher denominations, which fail as stable units of account and erode public trust in fiat currency. Cases like Zimbabwe's 2008-2009 , where monthly inflation exceeded 79 billion percent, saw banknotes become functionally worthless, prompting shifts to or foreign cash, while Germany's 1923 crisis involved wheelbarrows of notes for basic goods, illustrating how excessive printing fuels velocity collapse and social unrest. Such scenarios highlight banknotes' dual-edged impact: they provide short-term but amplify crises when loses credibility, often leading to dollarization or asset substitutions. Central banks' responses, like , mitigate logistical chaos but do not address underlying fiscal imbalances.

Controversies and Policy Debates

Enabling Illicit Finance and Tax Evasion

Banknotes facilitate illicit finance primarily through their inherent anonymity, enabling transactions that evade detection by financial surveillance systems. Unlike digital payments, which generate traceable records via banks or payment processors, physical cash allows peer-to-peer transfers without intermediaries, making it a preferred medium for money laundering across nearly all crime types, including drug trafficking and organized crime. The Financial Action Task Force (FATF) identifies cash as a core instrument for criminals due to its untraceability, with bulk cash smuggling—often involving high-denomination banknotes—remaining a dominant method for moving illicit proceeds internationally, as evidenced in the U.S. Treasury's 2024 National Money Laundering Risk Assessment, which highlights U.S. dollar notes' role in domestic and cross-border laundering. Similarly, the United Nations Office on Drugs and Crime (UNODC) estimates that drug traffickers laundered approximately US$1.6 trillion globally in 2009, equivalent to 2.7% of world GDP, with cash serving as the initial and persistent vector for integrating proceeds into legitimate channels before more complex layering. In terrorist financing, banknotes support low-value, high-volume operations by permitting discreet of operatives without digital footprints, as noted in FATF typologies where couriers and physical stockpiles underpin non-profit and charitable diversions for extremist groups. reports underscore 's persistence in criminal ecosystems, even amid digital alternatives, due to its and resistance to real-time monitoring, with criminals exploiting cash-intensive businesses like or remittances to "place" dirty money. UNODC data further links to broader illicit flows, estimating annual laundering volumes at 2-5% of global GDP (roughly €715 billion to €1.8 trillion), predominantly from markets where banknotes bridge production sites to consumer endpoints. Regarding tax evasion, banknotes underpin shadow economies by enabling unreported transactions that bypass invoicing and taxation, particularly in informal sectors like retail, construction, and services. The World Bank notes that dealings, absent receipts, amplify evasion risks, with empirical models linking higher cash circulation to expanded underground activities that erode bases. Currency demand approaches to shadow economy estimation reveal that elevated cash holdings correlate with morale deficits, as agents opt for anonymous bilateral trades to underreport income; for instance, studies across countries show average rates declining modestly from 2% in 1999 to 1.5% in 2010, yet persisting via in high-evasion environments. IMF analyses of underground growth attribute a significant portion to -facilitated and evasion in illicit trades, including and unreported labor, where physical notes allow circumvention of (VAT) and income reporting. Policies capping payments, such as those studied in evasion models, demonstrate causal reductions in shadow activity by forcing traceable alternatives, confirming cash's enabling role.

High-Denomination Notes and Criminal Use

High-denomination banknotes, such as the €500 note and the $100 bill, facilitate the transport and storage of large sums with minimal bulk, making them attractive for illicit activities including , drug trafficking, and . For instance, €1 million in €500 notes weighs approximately 2 kilograms and occupies a volume of about 1 liter, compared to 10 kilograms and 5 liters for the same amount in €100 notes, enabling criminals to move significant value discreetly across borders. has noted that while not all cash use is criminal, criminals universally rely on cash at some stage of , with high-value notes disproportionately seized in operations targeting . In response to these associations, the ceased production and issuance of the €500 note in May 2016, citing its potential to aid illegal activities, though existing notes retain status indefinitely. Law enforcement agencies, including the UK's , reported in 2010 that up to 90% of seized criminal cash in some cases consisted of €500 notes, prompting earlier restrictions in certain jurisdictions. Similarly, the US $100 bill, which surpassed the $1 bill in circulation volume by 2017 with much of the stock held abroad, has been linked to and illicit in emerging markets, where its stability and anonymity outweigh lower denominations for storing untraceable wealth. Empirical evidence tying high-denomination notes directly to volumes remains circumstantial, as criminals adapt to alternatives like digital transfers or lower denominations, and legitimate uses—such as savings in unstable economies—persist. Nonetheless, economists like argue that the net social cost of such notes outweighs benefits, given their in enabling underground economies estimated to evade taxes at rates of 6-70% of potential revenue in various countries. Proposals to eliminate the $100 bill in the , akin to historical discontinuations of higher denominations post-1969, have gained traction among advocates but face resistance due to revenues and privacy concerns.

Demonetization Policies and Their Outcomes

Demonetization policies declare specific banknote denominations no longer , compelling exchange for new within a deadline, often to eradicate black money, notes, or excess . These measures, implemented in various nations, aim to illicit economies but frequently cause acute short-term disruptions like shortages and transaction halts in cash-reliant sectors. Empirical analyses reveal mixed outcomes, with successes in curbing high-value but limited efficacy against broader underground activities due to rapid recirculation of funds via exemptions or laundering. In the United States, President Richard Nixon's 1969 demonetized bills of $500, $1,000, $5,000, and $10,000—denominations last printed in 1945—to combat , , and linked to large cash holdings. This policy effectively reduced circulation of these notes to under 0.01% of total currency by the , minimizing their use in illegal transactions without widespread economic fallout, as lower denominations sufficed for legitimate purposes. Outcomes included enhanced traceability of high-value dealings and negligible inflationary pressure from hoarded bills, though critics noted it did not eradicate crime, merely shifting tactics. India's November 8, 2016, demonetization invalidated ₹500 and ₹1,000 notes, representing 86% of by value (approximately $220 billion), targeting undeclared wealth, , and counterfeits. The policy triggered immediate chaos: bank queues, agricultural sales drops of up to 30%, and formal sector output declines, with GDP growth contracting by at least 3 percentage points in November–December 2016 due to curtailed activity in and informal . Nearly 99.3% of demonetized notes returned to banks by mid-2017, suggesting minimal black money annihilation as holders exploited exemptions, loans, or networks to launder funds. Counterfeit detection rose initially but counterfeit ₹500 notes surged post-policy, per data. Longer-term effects in included a 20–30% spike in digital transactions and tax base expansion, with individual returns rising 25% in 2017–2018, attributed to coerced formalization amid cash scarcity. However, peer-reviewed studies indicate persistent resilience, with employment in cash-intensive sectors like textiles falling 2 million jobs by early 2017 and no sustained decline, as structural incentives for evasion remained. Independent assessments, such as from the , emphasize that while demonetization exposed cash dependency vulnerabilities, its net economic cost outweighed benefits for core goals like wealth redistribution. Other instances, like India's 1978 demonetization of ₹1,000, ₹5,000, and ₹10,000 notes (0.5–1% of ), yielded modest black recovery of ₹7 but highlighted recurring implementation flaws, including elite exemptions that undermined equity. In Nigeria's reform, withdrawing high notes curbed but fueled to 40% amid supply mismanagement. These cases underscore a pattern: demonetization disrupts more effectively in digitized economies but falters where predominates, often failing to address root causes like weak without complementary reforms.

Privacy vs. Surveillance Trade-offs

Banknotes facilitate transactions that inherently preserve user , as physical exchanges leave no centralized digital record accessible to third parties, limiting to direct observation by involved parties. This anonymity contrasts with electronic payments, where data on payer, payee, amount, and timing are routinely logged by intermediaries, enabling potential government access for monitoring purposes. In jurisdictions like the , existing financial laws, such as the , mandate reporting of cash transactions exceeding $10,000, illustrating how even cash use is partially tracked while digital systems amplify traceability. The shift toward cashless systems exacerbates surveillance risks, as evidenced by , where accounted for less than 1% of GDP by 2019, with over 90% of transactions digital, resulting in comprehensive logging of routine purchases and heightened vulnerability to data breaches or state overreach. This transition has excluded segments like the elderly and , who face barriers to participation without digital , while enabling real-time profiling of spending patterns. Proponents of reduced circulation argue it curbs illicit finance, citing estimates that anonymous enables up to 10-20% of transactions in high-crime economies to evade detection, yet empirical analyses indicate that eliminating may redirect criminal activity to harder-to-trace digital methods like , without proportionally reducing overall illegality. Central bank digital currencies (CBDCs) represent a pivotal , promising efficiency but posing amplified threats through programmable features that could enforce spending limits, expirations, or geo-fencing, as explored in designs balancing auditability against . discussions on the emphasize offline capabilities to approximate cash's —where transactions remain to the issuer—but acknowledge that online variants risk aggregating user for anti-money laundering, potentially mirroring cash's only in limited scenarios. Critics, including analyses from the , contend that CBDCs could enable total financial visibility, eroding the bulwark against authoritarian controls seen in historical cash-dependent dissident economies, where digital alternatives facilitated account freezes during political unrest. While cash's facilitates —estimated at 2-3% of GDP in advanced economies—it also safeguards against systemic s like cyber outages, as demonstrated in Sweden's 2015-2020 banking disruptions that left cash-dependent users resilient. Policy debates underscore causal realism in these trade-offs: empirical data from declining cash use correlates with rising financial exclusion rates (up to 5% in low-digitalization groups), yet advocates prioritize reduction, overlooking long-term incentives for state expansion via data monopolies. Banknotes thus embody a decentralized check on centralized power, with their persistence tied to public resistance against traceable alternatives, as seen in ongoing European efforts to mandate amid .

Global Demand Fluctuations and Production Shifts

Global demand for banknotes has demonstrated resilience amid the rise of digital payments, with the value of increasing in many jurisdictions due to cash's role as a , medium for informal transactions, and hedge against uncertainty. The global banknotes market, valued at $8.1 billion in 2024, is projected to reach $9.6 billion by 2030, reflecting a (CAGR) of 2.7%, driven by persistent circulation needs in emerging economies and non-transactional . Alternatively, estimates place the market at $14.9 billion in 2024 with a higher CAGR of 5.5% through 2034, attributing growth to enhancements and replacement demands. Demand fluctuates significantly during economic shocks, with crises consistently elevating cash holdings as individuals seek and distrust electronic systems. In 2020, the triggered an abnormally high surge in euro banknote circulation, a pattern echoed in prior crises like the 2008 financial meltdown, where served precautionary motives beyond transactional use. Inflation's return in 2022 temporarily suppressed global demand by eroding real , but early 2024 data indicate a rebound, with production of new banknotes expanding at a 3.7% CAGR from 2019 to 2024 despite declining point-of-sale usage in advanced economies. Emerging markets sustain higher demand volumes due to limited banking access and preference for physical in remittances and savings, contrasting with digital-heavy regions like . Banknote production has shifted toward durable substrates and advanced printing technologies to address wear and counterfeiting, reducing long-term output needs while maintaining supply. The adoption of notes, pioneered in in 1988 and now used in over 30 countries including and the , extends lifespan to 2.5 times that of traditional cotton-linen , lowering replacement rates—for instance, polymer bills circulate 4–5 years versus 1–2 years for . This transition supports a projected 6% CAGR in the global banknote market through 2028, fueled by polymer's security features like transparent windows. Central banks forecast production volumes collaboratively; the , for example, bases euro note output on national central bank inputs and internal projections, while the U.S. produced 7.3 billion notes in fiscal year 2023, predominantly $20 and $100 denominations.
YearU.S. Notes Printed (millions)Key Denominations Focus
20207,256$100 (4.9B), $20 (1.7B)
20216,785$100 (4.1B), $20 (1.9B)
20227,179$100 (4.0B), $20 (2.3B)
20237,329$100 (4.1B), $20 (2.2B)
These shifts include outsourcing to specialized firms like and , which handle over 80% of global secure printing, enabling scalability amid demand variability. efforts, such as bio-based polymers and reduced usage, further influence production, aiming to lower environmental impacts from the estimated 576 billion notes in global circulation as of 2020.

Integration with Digital Payments

Banknotes facilitate entry into digital payment ecosystems by enabling users to convert physical into electronic balances through deposit mechanisms, thereby bridging traditional and modern financial systems. Automated teller machines (ATMs) equipped with cash deposit functions allow direct crediting of banknotes to linked digital accounts or mobile wallets, a feature widespread in developed economies since the early . Retail agent networks, particularly in emerging markets, extend this integration by accepting banknotes for cash-in services that top up digital wallets, as seen in systems like Kenya's , where over 200,000 agents handled billions in transactions by converting physical cash to balances as of 2023. This process supports monetary by allowing cash holders to participate in digital transactions without full banking . Complementarity between banknotes and digital payments persists amid declining cash usage, with banknotes often serving as a or backup that feeds into digital channels. The McKinsey 2025 Global Payments Report notes cash accounted for 46% of worldwide payments, down from 50% in 2023, yet its integration via hybrid systems—such as funding digital wallets through deposits—sustains its role in low-value or offline scenarios. , the Federal Reserve's 2025 Diary of Consumer Payment Choice found that more than 94% of consumers used as a primary , backup instrument, or in 2024, frequently depositing it into apps like via retail partners such as , where users hand over banknotes for instant digital crediting. This reflects causal dynamics where physical currency's tangibility and universal acceptance provide entry points for digital expansion, particularly for the or underbanked populations. Policy discussions emphasize this integration to balance efficiency gains from digital payments with cash's resilience. The European Central Bank's July 2025 analysis of a potential highlights how banknotes' offline usability complements digital systems, with integration via interoperable infrastructures ensuring seamless reconciliation of physical deposits into electronic ledgers. Similarly, the ' 2025 retail payment trends indicate faster digital adoption coexists with stable cash volumes, as banknotes are digitized through point-of-sale cash-back options or agent-funded transfers, mitigating risks like digital exclusion during outages. Empirical data from these sources underscore that without such bridges, digital payment growth could exacerbate financial divides, as cash deposits enable broader adoption in regions with uneven or device access. Challenges in this integration include fees for cash handling, which some digital providers impose to discourage physical use, and logistical costs for central banks in maintaining deposit networks amid production shifts. Nonetheless, innovations like biometric-linked cash deposit kiosks in demonstrate ongoing adaptations, preserving banknotes' utility as a foundational input to digital flows while digital systems enhance and speed for subsequent transactions.

Innovations in Smart and Traceable Features

Modern banknotes incorporate advanced features designed to enhance authenticity verification and enable , countering sophisticated counterfeiting operations estimated to exceed $2 trillion annually. These innovations include optically variable inks, holograms, and security threads, but recent developments emphasize "smart" elements that integrate electronic or interactive capabilities for real-time . For instance, proposals for embedding RFID microchips allow banknotes to transmit unique identifiers when interrogated by NFC-enabled devices, facilitating instant validation without physical contact. One key innovation involves RFID μ-chips embedded within the banknote substrate, which store encrypted data such as serial numbers and denomination details. When scanned by an NFC smartphone, the chip responds with a digital signature verifiable against a central database, enabling consumers or authorities to confirm genuineness and trace circulation history. This approach, detailed in 2015 research, promises to deter counterfeiting by allowing widespread, low-cost verification while providing forensic traceability for illicit transactions. However, practical implementation remains limited due to challenges in chip durability against wear, folding, and environmental exposure, as well as elevated production costs that could inflate seigniorage expenses. Traceability has advanced through digital printing techniques that link visual elements, such as serialized images, directly to unique banknote identifiers, as seen in the Banknote Awards for innovative EMEA designs using inkjet numbering to correlate phoenix motifs with serials for enhanced forensic tracking. Complementary features include machine-readable security threads with metallic nanostructures that encode scannable by automated systems, aiding central banks in monitoring note fitness and detecting anomalies in distribution patterns. These elements support causal links between note issuance and redemption, informing without relying on invasive . Emerging polymer-based functional materials further innovate traceable features by integrating stimuli-responsive elements, such as photochromic or thermochromic polymers, that reveal hidden patterns under specific conditions, verifiable via spectrometry for anti-counterfeiting. A 2025 study highlights their potential for high-capacity authentication, combining overt visuals with covert, traceable markers resistant to replication. Despite these advances, no major has adopted embedded RFID at scale as of 2025, prioritizing substrate-integrated optical and tactile features for cost-effectiveness and public usability over fully smart, network-dependent systems.

References

  1. https://www.merriam-webster.com/dictionary/banknote
  2. https://www.investopedia.com/terms/b/banknote.asp
  3. https://www.citeco.fr/10000-years-history-economics/antiquity-to-middle-ages/the-first-banknotes-or-paper-money
  4. https://www.theibns.org/joomla/index.php?option=com_content&view=article&id=251&Itemid=127&limitstart=3
  5. https://www.bankofengland.co.uk/museum/online-collections/banknotes/early-banknotes
  6. https://www.ecb.europa.eu/euro/banknotes/production/html/index.en.html
  7. https://www.ecb.europa.eu/euro/banknotes/current/security/html/index.en.html
  8. https://www.ecb.europa.eu/euro/banknotes/research/html/index.en.html
  9. https://www.investopedia.com/terms/l/legal-tender.asp
  10. https://www.bankofengland.co.uk/explainers/what-is-legal-tender
  11. https://dictionary.justia.com/bank-note
  12. https://www.law.cornell.edu/uscode/text/31/5103
  13. https://www.uscurrency.gov/acceptance-and-use-older-design-federal-reserve-notes
  14. https://www.federalreserve.gov/faqs/money_15197.htm
  15. https://www.dailyforex.com/forex-articles/bank-note/182650
  16. https://www.bankofcanada.ca/banknotes/principles-bank-note-design/
  17. https://www.pcgs.com/news/why-did-united-states-banknotes-shrink-in-size
  18. https://www.banknoteworld.com/blog/the-dimensions-of-money-why-do-banknotes-come-in-different-sizes/
  19. https://www.uscurrency.gov/sites/default/files/download-materials/en/CEP_Dollars_In_Detail_Brochure.pdf
  20. https://www.bankofengland.co.uk/quarterly-bulletin/2021/2021-q3/our-new-banknotes-the-journey-from-design-to-launch
  21. https://www.alliantcreditunion.org/money-mentor/the-dollar-bill-believe-it-or-not
  22. https://www.bankofengland.co.uk/museum/online-collections/banknotes/banknote-design
  23. https://www.ecb.europa.eu/euro/banknotes/current/design/html/index.en.html
  24. http://banknoteinfo.net/security-features/
  25. https://regulaforensics.com/blog/banknote-security-features-watermarks/
  26. https://www.euronetatms.ie/banknotes-security-features/
  27. https://www.delarue.com/thought-leadership/designing-a-secure-banknote
  28. https://www.thoughtco.com/the-invention-of-paper-money-195167
  29. https://historyofinformation.com/detail.php?entryid=242
  30. https://silk-road.com/artl/papermoney.shtml/
  31. https://afe.easia.columbia.edu/songdynasty-module/econ-rev-money.html
  32. https://www.hoover.org/research/rise-and-demise-paper-money-imperial-china
  33. https://rethinkq.adp.com/artifact-paper-money-china/
  34. https://www.bankofengland.co.uk/museum/online-collections/blog/world-first-central-bank-invention-of-banknotes
  35. https://www.riksbank.se/en-gb/about-the-riksbank/history/historical-timeline/
  36. https://www.goteborgsstadsmuseum.se/en/online/vardefullt/history-of-money/europes-first-banknote/
  37. https://www.spink.com/media/view?id=338
  38. https://www.money.org/money-museum/virtual-exhibits-hom-case17/
  39. https://www.bankofengland.co.uk/banknotes/withdrawn-banknotes
  40. https://www.theguardian.com/business/2013/sep/10/banknotes-history
  41. https://mises.org/mises-daily/great-paper-money-experiment
  42. https://guides.loc.gov/history-of-money/us-paper-money
  43. https://www.federalreservehistory.org/essays/banking-panics-of-the-gilded-age
  44. https://home.treasury.gov/about/history/freedmans-bank-building/financial-panic-of-1873
  45. https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/1969/the-boe-note-a-short-history.pdf
  46. https://bankunderground.co.uk/2016/12/19/the-ghost-of-crises-past-present-and-future-the-bank-charter-act-goes-on-trial-in-1847/
  47. https://www.banque-france.fr/en/banque-de-france/institution-rooted-history/collections
  48. https://histoire.bnpparibas/en/a-necessity-note-of-1871-from-comptoir-descompte-de-paris/
  49. https://www.investopedia.com/ask/answers/09/gold-standard.asp
  50. https://cepr.org/voxeu/columns/end-gold-standard-and-beginning-recovery-great-depression
  51. https://www.antiquesage.com/how-international-gold-standard-ended-1930s/
  52. https://www.history.com/this-day-in-history/april-20/fdr-takes-united-states-off-gold-standard
  53. https://www.philadelphiafed.org/the-economy/monetary-policy/lessons-learned-from-the-gold-standard-implications-for-inflation-output-and-the-money-supply
  54. https://multi-act.com/evolution-of-money-drawbacks-of-the-fiat-currency-system/
  55. https://mises.org/power-market/fiat-money-greatest-danger-our-economy-faces
  56. https://www.elibrary.imf.org/view/journals/001/2020/254/article-A001-en.xml
  57. https://repository.law.umich.edu/cgi/viewcontent.cgi?article=1339&context=law_econ_current
  58. https://www.bankofengland.co.uk/-/media/boe/files/ccbs/resources/understanding-the-central-bank-balance-sheet.pdf
  59. https://www.legislation.gov.uk/ukpga/Vict/7-8/32/enacted
  60. https://bpi.com/legal-authority-to-issue-a-u-s-central-bank-digital-currency/
  61. https://fraser.stlouisfed.org/files/docs/publications/frbrichreview/pages/65387_1960-1964.pdf
  62. https://www.bankofengland.co.uk/about/history
  63. https://ciaotest.cc.columbia.edu/journals/cato/v32i2/f_0025210_20589.pdf
  64. https://www.ecb.europa.eu/press/key/date/2025/html/ecb.sp250320_1~41c9459722.en.html
  65. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2260952
  66. http://www.rampantscotland.com/SCM/story.htm
  67. https://www.histecon.magd.cam.ac.uk/coins_april2014.html
  68. https://www.cato.org/blog/how-us-government-paper-currency-began-how-private-banknotes-ended
  69. https://www.richmondfed.org/publications/research/economic_brief/2022/eb_22-21
  70. https://collectingpapermoney.spmc.org/wiki/A_Brief_History_of_U.S._Obsolete_Bank_Notes_and_Scrip
  71. https://www.philadelphiafed.org/the-economy/banking-and-financial-markets/the-free-banking-era-a-lesson-for-today
  72. https://thedailyeconomy.org/article/entrepreneurs-thrived-during-americas-free-banking-era/
  73. https://www.riksbank.se/en-gb/about-the-riksbank/history/historical-timeline/1800-1899/private-banks-issue-their-own-banknotes/
  74. https://www.elgaronline.com/downloadpdf/edcollchap/book/9781788972246/book-part-9781788972246-11.pdf
  75. https://www.clevelandfed.org/publications/economic-commentary/2007/ec-20070101-private-money-in-our-past-present-and-future
  76. https://www.uscurrency.gov/denominations
  77. https://www.ecb.europa.eu/euro/banknotes/html/index.en.html
  78. https://www.centralbank.ie/consumer-hub/notes-and-coins/euro-banknotes
  79. https://www.centralbanking.com/benchmarking/currency/7960039/majority-of-central-banks-maintain-currency-denominations
  80. https://www.bep.gov/currency/how-money-is-made
  81. https://www.bankofengland.co.uk/banknotes/current-banknotes
  82. https://www.frbservices.org/financial-services/cash
  83. https://www.federalreserve.gov/paymentsystems/coin_about.htm
  84. https://www.gi-de.com/en/currency-technology/banknote-solutions/banknote-production/substrates/banknote-paper
  85. https://www.imf.org/external/pubs/ft/fandd/2016/06/currency.htm
  86. https://csiropedia.csiro.au/polymer-banknotes/
  87. https://www.makreo.com/report/global-polymer-banknote-substrate-market-size-and-forecast-2018-2030
  88. https://genuine-printing.com/polymer-vs-cotton-banknotes/
  89. https://www.rba.gov.au/publications/bulletin/2019/dec/a-cost-benefit-analysis-of-polymer-banknotes.html
  90. https://www.sciencedirect.com/science/article/abs/pii/S1062940804000336
  91. https://blog.remitly.com/en-ae/finance/polymer-money/
  92. https://www.bsp.gov.ph/SitePages/CoinsAndNotes/PolymerBanknote.aspx
  93. https://www.bankofcanada.ca/banknotes/bank-note-series/frontiers/lifespan-bank-note/
  94. https://www.euronews.com/2018/05/16/polymer-vs-paper-banknotes-which-one-is-better-for-environment-
  95. https://www.royaldutchkusters.com/blog/the-five-pros-and-cons-of-polymer-banknotes
  96. https://www.centralbanking.com/central-banks/currency/banknotes/7835756/are-we-entering-the-polymer-age
  97. https://www.gi-de.com/en/currency-technology/banknote-solutions/banknote-security-technology/printed-security-features
  98. https://www.komorisolutions.com/onpress/en/article/detail_143.html
  99. https://banknote.com/printing-techniques/
  100. https://www.researchgate.net/publication/241315504_Circulation_simulator_method_for_evaluating_bank_note_and_optical_feature_durability
  101. https://www.federalreserve.gov/faqs/how-long-is-the-life-span-of-us-paper-money.htm
  102. https://www.ecb.europa.eu/press/blog/date/2023/html/ecb.blog230824~362178a805.en.html
  103. https://www.banque-france.fr/en/at-your-service/central-banks-public-institutions/design-manufacture-banknote-paper-banknotes/everfit
  104. https://www.sciencedirect.com/science/article/abs/pii/S0048969718305709
  105. https://www.ugra.ch/en/portfolio/lifetime-test-of-banknotes/
  106. https://www.bankofcanadamuseum.ca/2021/10/life-cycle-bank-note/
  107. https://www.bankofcanada.ca/wp-content/uploads/2011/06/LCA_executive_summary.pdf
  108. https://www.bankofengland.co.uk/-/media/boe/files/banknotes/polymer/lca-of-paper-and-polymer-bank-notes.pdf
  109. https://www.bankofengland.co.uk/-/media/boe/files/banknotes/polymer/carbon-footprint-assessment.pdf
  110. http://www.pjsymes.com.au/articles/security.htm
  111. https://www.theibns.org/joomla/index.php?option=com_content&view=article&id=251&Itemid=127&limitstart=6
  112. https://www.usmarshals.gov/who-we-are/history/historical-reading-room/catching-counterfeiters
  113. https://www.secretservice.gov/sites/default/files/reports/2020-12/KnowYourMoney.pdf
  114. https://reconnaissance.net/security-threads-for-banknotes/
  115. https://www.gi-de.com/en/currency-technology/banknote-solutions/banknote-security-technology/insights-banknote-security-technology/30-years-holograms-on-banknotes
  116. https://www.uscurrency.gov/history/archived
  117. https://www.bep.gov/currency/history
  118. https://museum.rba.gov.au/exhibitions/pocket-guides/the-reinvention-of-banknotes/the-risk-of-counterfeit.html
  119. https://www.rba.gov.au/publications/bulletin/2019/sep/a-brief-history-of-currency-counterfeiting.html
  120. https://medium.com/knowledge-stew/the-counterfeiter-who-conned-the-confederacy-23d6df7eb837
  121. https://digitalcommons.butler.edu/cgi/viewcontent.cgi?article=1454&context=ugtheses
  122. https://www.pmgnotes.com/news/article/7138/the-portuguese-bank-note-crisis-of-1925/
  123. https://www.amusingplanet.com/2023/08/the-portuguese-bank-note-scandal-of-1925.html
  124. https://www.bankofengland.co.uk/museum/online-collections/blog/operation-bernhard
  125. https://www.pmgnotes.com/news/article/7262/operation-bernhard-counterfeiting-during-world-war-ii/
  126. https://www.everycrsreport.com/reports/RL33324.html
  127. https://abcnews.go.com/US/counterfeiting-modern-age/story?id=108005573
  128. https://cashessentials.org/publication/us-counterfeit-cash-crackdown/
  129. https://news.sky.com/story/money-for-nothing-the-story-of-the-biggest-counterfeiter-in-us-history-11942377
  130. https://www.ebsco.com/research-starters/science/counterfeit-banknote-detection-pens
  131. https://paycomplete.com/can-money-counting-machines-detect-fake-notes/
  132. https://www.ecb.europa.eu/paym/cashprof/cashhand/devices/html/results.en.html
  133. https://www.gi-de.com/en/currency-technology/currency-management/scalable-cash-cycle-solutions/banknote-processing-systems/bps-sensors
  134. https://www.authentix.com/banks/
  135. https://www.federalreserve.gov/econres/ifdp/files/ifdp1404.pdf
  136. https://www.gi-de.com/corporate/Currency_Technology/Currency_Management/Scalable_Cash_Cycle_Solutions/GD-A-Guide-to-Navigating-Counterfeit-Currency-Trends-in-the-US-2025.pdf
  137. https://www.ecb.europa.eu/euro/banknotes/ac/html/index.en.html
  138. https://www.interpol.int/en/Crimes/Counterfeit-currency-and-security-documents
  139. https://www.ecb.europa.eu/press/pr/date/2024/html/ecb.pr241219~172b929461.en.html
  140. https://www.mckinsey.com/industries/financial-services/our-insights/global-payments-in-2024-simpler-interfaces-complex-reality
  141. https://www.frbservices.org/news/fed360/issues/060325/cash-2025-findings-diary-consumer-payment-choice
  142. https://www.imf.org/en/Publications/WP/Issues/2022/02/04/Falling-Use-of-Cash-and-Demand-for-Retail-Central-Bank-Digital-Currency-512766
  143. https://www.banque-france.fr/en/publications-and-statistics/publications/banknote-issuance-while-velocity-their-circulation-slowing
  144. https://publication-bi.org/repec/idn/wpaper/WP132022.pdf
  145. https://www.tandfonline.com/doi/full/10.1080/00074918.2024.2398347
  146. https://www.ecb.europa.eu/ecb-and-you/explainers/tell-me/html/seigniorage.en.html
  147. https://www.bankofcanada.ca/2022/07/seigniorage/
  148. https://www.dallasfed.org/~/media/documents/research/er/1998/er9803b.pdf
  149. https://www.investopedia.com/terms/s/seigniorage.asp
  150. https://www.centralbanking.com/central-banks/governance/7962701/the-monetary-base-and-seigniorage-in-a-digital-era
  151. https://www.investopedia.com/ask/answers/042015/how-does-money-supply-affect-inflation.asp
  152. https://www.economicshelp.org/blog/111/inflation/money-supply-inflation/
  153. https://www.history.co.uk/articles/just-print-more-money-history-s-worst-cases-of-hyperinflation
  154. https://www.investopedia.com/ask/answers/061515/what-are-some-historic-examples-hyperinflation.asp
  155. https://www.worldbank.org/en/topic/financialinclusion/overview
  156. https://www.bundesbank.de/resource/blob/634984/d4289ca26522bb64af4903a5c054bf45/472B63F073F071307366337C94F8C870/2014-09-16-currency-demand-during-the-global-financial-crisis-data.pdf
  157. https://www.econstor.eu/bitstream/10419/247918/1/1780255020.pdf
  158. https://www.sciencedirect.com/science/article/pii/S2666143824000103
  159. https://www.investopedia.com/terms/h/hyperinflation.asp
  160. https://www.europol.europa.eu/media-press/newsroom/news/cash-still-king-criminals-prefer-cash-for-money-laundering
  161. https://home.treasury.gov/system/files/136/2024-National-Money-Laundering-Risk-Assessment.pdf
  162. https://unis.unvienna.org/unis/en/pressrels/2011/uniscp661.html
  163. https://www.fatf-gafi.org/en/publications/Methodsandtrends/Fatfterroristfinancingtypologiesreport.html
  164. https://www.europol.europa.eu/sites/default/files/documents/europolcik%2520%25281%2529.pdf
  165. https://www.europol.europa.eu/crime-areas/criminal-finances-and-money-laundering
  166. https://openknowledge.worldbank.org/entities/publication/ac342894-d147-5e69-bc7a-3193c55a8957
  167. https://www.ifo.de/DocDL/dicereport414-db4.pdf
  168. https://www.mdpi.com/2071-1050/14/20/13179
  169. https://www.imf.org/external/pubs/ft/issues/issues30/
  170. https://www.sciencedirect.com/science/article/abs/pii/S0164070423000204
  171. https://cepr.org/voxeu/columns/gains-eliminating-eu500-note
  172. https://www.europol.europa.eu/media-press/newsroom/news/europol-welcomes-decision-of-ecb-to-stop-printing-eur-500-notes
  173. https://www.ecb.europa.eu/press/pr/date/2016/html/pr160504.en.html
  174. https://www.usnews.com/news/articles/2016-05-06/can-europe-thwart-criminals-and-terrorists-by-phasing-out-big-bills
  175. https://www.imf.org/en/Publications/fandd/issues/2019/06/what-makes-the-US-100-bill-so-popular-currency
  176. https://www.cnbc.com/2019/02/27/theres-been-a-mysterious-surge-in-100-bills-in-circulation-possibly-linked-to-global-corruption.html
  177. https://www.hks.harvard.edu/centers/mrcbg/publications/awp/awp52
  178. https://newrepublic.com/article/178350/treasury-100-dollar-bill-criminals
  179. https://www.investopedia.com/terms/d/demonetization.asp
  180. https://timesofindia.indiatimes.com/etimes/trending/7-countries-around-the-world-that-have-undergone-demonetization-in-the-past/photostory/119639696.cms
  181. https://www.nber.org/system/files/working_papers/w25370/w25370.pdf
  182. https://www.nber.org/digest/feb19/indias-demonetization-reduced-employment-and-economic-activity
  183. https://academic.oup.com/qje/article-abstract/135/1/57/5567189
  184. https://www.sciencedirect.com/science/article/pii/S0047272723000890
  185. https://www.brookings.edu/articles/early-lessons-from-indias-demonetization-experiment/
  186. https://www.ijbmi.org/papers/Vol%2812%295/I1205101104.pdf
  187. https://www.ecb.europa.eu/paym/groups/erpb/shared/pdf/16th-ERPB-meeting/Report_from_the_ERPB_working_group_on_access_to_and_acceptance_of_cash.pdf
  188. https://www.dbresearch.com/PROD/RPS_EN-PROD/PROD0000000000495958/Cash_empowers_the_individual_through_data_protecti.xhtml
  189. https://www.aei.org/op-eds/financial-surveillance-in-the-west-is-more-like-chinas-than-we-admit-digital-dollar-concern-reveals/
  190. https://www.wired.com/story/sweden-cashless-society/
  191. https://theconversation.com/sweden-is-a-nearly-cashless-society-heres-how-it-affects-people-who-are-left-out-216586
  192. https://www.sciencedirect.com/science/article/pii/S2666143820300041
  193. https://repository.law.umich.edu/cgi/viewcontent.cgi?article=2111&context=mjil
  194. https://scholarship.law.ufl.edu/cgi/viewcontent.cgi?article=2239&context=facultypub
  195. https://www.ecb.europa.eu/euro/digital_euro/timeline/profuse/shared/pdf/ecb.derdgp240905_RDG_progress_report_September.en.pdf
  196. https://www.cato.org/free-society/fall-2024/cbdc-spells-doom-financial-privacy
  197. https://www.cato.org/publications/strengthening-financial-privacy-digital-age-protect-consumers-sweeping-surveillance
  198. https://www.brookings.edu/articles/cash-will-soon-be-obsolete-will-america-be-ready/
  199. https://www.ecb.europa.eu/press/economic-bulletin/articles/2024/html/ecb.ebart202402_02~d821c613a7.en.html
  200. https://www.ecb.europa.eu/press/economic-bulletin/articles/2021/html/ecb.ebart202102_03~58cc4e1b97.en.html
  201. https://www.gi-de.com/en/spotlight/currency-technology/how-long-does-paper-money-last
  202. https://www.businesswire.com/news/home/20250324197999/en/Banknotes-Global-Strategic-Business-Report-2025-Global-Market-to-Reach-%25249.6-Billion-by-2030---Collaboration-Between-Central-Banks-and-Security-Printers-Enhances-Developments---ResearchAndMarkets.com
  203. https://www.gminsights.com/industry-analysis/banknotes-market
  204. https://www.bankikredyt.nbp.pl/content/2025/01/BIK_01_2025_01.pdf
  205. https://cashessentials.org/update-on-the-global-demand-for-banknotes/
  206. https://www.smithers.com/services/market-reports/security/the-future-of-banknotes-in-a-digital-world-to-2029
  207. https://www.makreo.com/report/global-banknote-market-analysis-and-forecast-2028-edition-2024
  208. https://www.wjbf.com/business/press-releases/ein-presswire/748026400/global-banknote-market-to-grow-6-by-2028-rising-adoption-of-polymer-banknotes-makreo-research
  209. https://www.ecb.europa.eu/stats/policy_and_exchange_rates/banknotes%2Bcoins/production/html/index.en.html
  210. https://www.bep.gov/currency/production-figures/annual-production-reports
  211. https://www.gi-de.com/en/spotlight/trends-insights/4-currency-trends-for-2025
  212. https://www.spherity.com/post/fighting-a-growing-global-2-trillion-usd-counterfeiting-market-the-role-of-advanced-technologies-in
  213. https://onlinelibrary.wiley.com/doi/10.1155/2015/264514
  214. https://patents.google.com/patent/US8931688B2/en
  215. https://www.researchgate.net/publication/282496113_Banknote_Validation_through_an_Embedded_RFID_Chip_and_an_NFC-Enabled_Smartphone
  216. https://www.nfc-tag-shop.de/info/en/knowledge/nfc-applications/nfc-in-banknotes/
  217. https://reconnaissance.net/the-very-best-in-design-and-innovation-in-emea-recognised-at-2024-regional-banknote-and-id-document-awards/
  218. https://www.gi-de.com/en/currency-technology/banknote-solutions/banknote-security-technology/insights-banknote-security-technology
  219. https://www.sciencedirect.com/science/article/abs/pii/S0300944025007027
  220. https://www.rfidjournal.com/faq/can-rfid-be-embedded-in-money/38628/
Add your contribution
Related Hubs
User Avatar
No comments yet.