News in Brief

New Currency Orders for Spectra

Banknote authentication and security software provider Spectra Systems Corporation has announced three new contract awards, generating $700,000 of additional unforecasted revenue for the 2022 calendar year.

One is an additional order for covert materials from its largest central bank customer, increasing this year’s initial order by 20% and bringing the aggregate order for the current year to 75% of last year’s record order size.

Another is an order for covert materials, from an AIM-listed customer which has renewed its sensor service contract at nearly double its historical annual value.

Chief executive Dr Nabil Lawandy said: ‘we are delighted to announce these new contract awards which deliver further growth in revenues from existing customers across materials, service and software business lines’.

Croatia Prepares for the Euro

Croatia hopes to hear in July this year whether it can join the Eurosystem and adopt the euro as its currency, with an issue date of January 2023. Bulgaria is also waiting to hear but with a later launch date of 2024.

The Croatian National Bank has urged people to deposit their kuna banknotes into banks to make the transition easier. 36 billion kuna ($5.4 billion) is in circulation and the CNB is expecting about 500 million notes to be returned. Although people will be able to exchange kuna banknotes for euros for an unlimited period, and three years for coins, in other countries experience shows that people tend to exchange the vast majority of their legacy currency extremely quickly.

The Bank estimates the cost of switching to the euro will be 916 million kuna ($138 million) in total, while commercial banks estimate it will cost them an additional 1 billion kuna in lost exchange fees. It will, though, reduce their currency risk and improve stability.

It will cost the Bank some 800 million kuna for its euro banknotes. It will be producing the coins itself. Of these, more than a billion, enough to fill 260 trucks, will need to be withdrawn. They will be moved to a secret location provided by the Ministry of Defence and stored for three years. Kuna banknotes, meanwhile, will be destroyed as they return.

Ecuador Implements Anti-Theft Systems for Banknotes

The Central Bank of Ecuador has approved the implementation, through Resolution 017, of IBNS (Intelligent Banknote Neutralisation Systems) as a deterrent to cash robberies, in particular thefts from ATMs.

The systems consist of a device that is activated automatically when an attempted robbery is detected at ATMs and during the transport and custody of notes, to stain them with an indelible ink. All financial institutions will be required to implement the resolutions.

The Bank has stated that it will not accept any banknotes from individuals that have been stained in this way. Only those financial entities that totally or partially recover stained notes following a criminal act will be able to exchange them at the Bank.

The Bank has further recommended that citizens and businesses that carry out financial transactions refuse to accept stained notes. It is issuing guidelines to financial institutions and carrying out a PR campaign to make them aware of the new regulations.

Uruguay, Chile and Paraguay are some of the other countries in the region that already use the technology.

First Trust Bank Begins Withdrawing Notes

First Trust Bank, one of the four note issuing banks in Northern Ireland, which announced two years ago that it will stop issuing its own notes as of June this year, has already started the withdrawal and is now only issuing Bank of England notes in its ATMs.

First Trust Bank is a subsidiary of AIB (Allied Irish Banks) and, along with the three other note issuing banks, has been issuing its own notes since 1929. It says that its decision to withdraw from banknote issue is a commercial decision which took into account the increasing use of digital payment methods and mobile technology.

Its banknotes will remain legal tender until 30 June. After that date, anyone still holding a First Trust Bank banknote can exchange these for Bank of England banknotes, or other sterling banknotes of equivalent value, in person at any First Trust Bank branch at no cost. There is no time limit on this.

US Coin and Banknote Production

The US Mint’s production figures for 2021 show that 14.5 billion coins were minted in the year, down 1.9% from 14.7 billion the previous year, when production was ramped up to alleviate coin circulation issues brought on by the COVID-19 pandemic.

The Federal Reserve continues to order more 1 cent coins from the Mint than any other denomination, even though it now costs 2.1 cents to make and distribute each one. The 7.9 billion cents struck last year represents 54.6% of the combined production total for 2021. The number was up by 4% over the year before.

As previously noted, higher demand for cash has also resulted in the Federal Reserve increasing its order for banknotes from the Bureau of Engraving and Printing, which in volume terms will be in the 6.8 to 9.6 billion range, and in value terms in the $310 billion to $3 billion range. The final number printed in 2021 was 7 billion.

The Fed has also stated that currency in circulation increased by 4 billion notes (or $212.8 billion) between June 2020 and June 2021. During the same period the previous year, it increased by 5.1 billion notes ($226.3 billion).

Print orders for US banknotes – 2013-2022. The right hand bar is the number of banknotes the BEP has committed to delivering in the current fiscal year.