Central Banks and Cash Round-Up

In our latest monthly summary of central bank annual reports, we look at the Philippines, Korea, Indonesia, Liberia, Eastern Caribbean, Colombia and Taiwan.

Bangko Sentral ng Pilipinas (BSP)

BSP produced 2.3 billion banknotes and 1.3 billion coins in 2022. In addition, it produced 1,440 presidential medals and state decorations, 5,943 commemorative coins, and 3,632 commemorative medals.

Polymer notes: BSP started issuing 1,000 piso polymer banknotes in April 2022. It says that its focus on clean notes and sustainability are behind its decision to adopt polymer. By 2023, the BSP expects 500 million 1,000 piso polymer banknotes to be in circulation alongside the existing 1,000 piso paper banknotes. It is planning to work with a state university to conduct studies on how unfit polymer banknotes can be usefully used.

As of the end of December 2022, 17,304 ATMs – 92% of the total number of ATMs in the country – had been recalibrated by banks to dispense the polymer banknotes. Up to 7,274 of these are in the Manila region. 53.37 million polymer notes had been issued to banks by 31 December 2022.

Coin destruction: To avoid the recurrence of accumulating a high volume of coins needing disposal, BSP has bought a low-capacity coins defacement machine (CDM) and is actively defacing newly received CUMD coins. Currently, the machine operates at an average of 120,000 pieces (60 bags) of defaced coins each day.

Digitisation: Cash withdrawal declined by 6.9% compared with 2021 because of the combined impact of the BSP’s digitalisation initiatives and the strengthened implementation of the Cash Service Alliance (CSA).

BSP has carried out a study on the shift to a coinless society. It looked at the experiences and policies of selected central banks with the aim of accelerating adoption and use of digital payment platforms in the Philippines.

Combined PESONet and InstaPay transactions increased by 21% in volume and 37% in value in 2022 compared with 2021. Transaction volumes through InstaPay, a fast payment system, have overtaken ATM transactions, 548 million in 2022 compared with 388 million transactions using ATMs.

Bank of Korea (BoK)

Currency Issuance: In 2022, the value of currency in circulation reached 174.8623 trillion won, an increase of 4.4% from the end of 2021.

Coins: In 2022 the BoK issued seven types of commemorative coins to celebrate three occasions (the Korean National Parks series, the 25th World Scout Jamboree and the successful launch of the Nuri Rocket).

KOMSCO: The Korean state owned supplier of coins and banknotes produced and supplied the BoK with 710 million banknotes, 6.6% less than the previous year owing primarily to the decline in 50,000 won banknotes in circulation. Coin circulation was 82.7 million coins in 2022, down 14.1% from the previous year. The coin reduction was due to a general decrease in demand.

The total value of the currency produced amounted to 19.9614 trillion won, a decrease of 26.9% year-on-year.

Counterfeiting: In 2022, a total of 150 counterfeit banknotes were discovered, a decrease of 26 from the 176 counterfeits detected in 2021, which marked the lowest level since 1998, when related statistics were first published.

Guarantee of the Right to Use Cash: Since 2020, the BoK has conducted promotional campaigns to guarantee the right to use cash to ensure that its use is not excluded as a means of payment and settlement in commercial transactions. To address the trend toward cashless bus rides, the BoK consulted local governments and required that they provide viable alternatives to cash for citizens who have no choice but to use cash.

Bank Indonesia (BI)

In 2022 the value of cash in circulation rose by 6.95% to IDR 52.54 billion. The value of electronic money transactions rose by 30.84% and digital banking transactions by 28.72%, reflecting the changing payment behaviour in the country.

In 2022 BI used the seventh series of banknotes as legal tender, the 2022 Emission Year (TE) series. The new designs are more colourful, vibrant, and sharper in design and colour, have enhanced security features and are made from more durable materials than their predecessors.

Cash management: As part of BI’s work to be a leading digital central bank, it has digitalised every stage of its Rupiah Currency Management, from planning to end of life for rupiah currency, allowing automation and integration that reduces human intervention. This digitalisation is being phased in at all Cash Depositories.

In 2022, BI phased in Warehouse Management System Racking Systems (WMS-RS) as part of the digitalised infrastructure in a further five Cash Depositories, adding to the ten already in place, along with one BO-Regional Cash Depository.

Also, BI installed Automatic Banknote Feeding and Packaging Systems (ABFPS) in banknote sorting machines in West Java and East Java, and one in South Sulawesi. ABFPS allows integrated and end-to-end rupiah processing, increasing processing throughput. These new machines are in addition to one ABFPS in a FO-Cash Depository and three in BO-Regional Cash Depositories. Additional WMS-RS and ABFPS installations are planned in 2023.

Serial Number Reading (SNR): BI has implemented SNR in banknote sorting machines in 24 Cash Depositories as part of its work to prevent and eradicate counterfeits. In addition, SNR can help BI evaluate the circulation life of a banknote so that it can withdraw and destroy the currency at the right time.

Central Bank of Liberia (CBL)

CBL successfully implemented a currency exchange programme for a new series of notes and coins. A significant portion of the old Liberian currency will be withdrawn from circulation and replaced with the new currency by the end of 2023. In addition, CBL constructed a cash hub in Gbarnga, Bong County.

The stock of Liberian dollar currency in circulation (CIC) at end-December 2022 increased by 8.8% to L$26,198.43 million, primarily induced by 37.3% growth in currency held in banks. CIC and currency outside banks expanded by 9% and 8.3% respectively.

CBL is authorised by the country's Parliament to print and mint new Liberian currency over 2021, 2022 and 2024. The purpose is to support effective monetary policy operations, gradual de-dollarisation and confidence in the banking sector.

Delivery of the new currency started in November 2021 and issue was begun at once due to a short-term liquidity requirement. The next delivery was in February 2022, allowing the start of a gradual replacement programme.

The value of banknotes and coins bought by CBL was L$34.534 billion and L$0.463 billion, respectively. Nearly 72% of the total had been delivered by the end of 2022, with the balance to be delivered in 2024. The banknote denominations are the L$1,000, L$500, L$100, L$50 and L$20 notes, and L$10 and L$5 coins.

CBL constructed additional storage facilities, including a temporary facility, and set up a temporary space in its auditorium for processing and verification of the old banknotes, pending completion of the renovation of the former National Housing and Savings Bank (NHSB) as a permanent storage facility.

The currency exchange exercise was implemented on a gradual basis, mainly through the commercial banks. CBL reached an agreement with the banks to speed up the exchange exercise by giving special attention to non-account holders or the unbanked population. In September 2022, CBL officially launched a public awareness campaign.

Prior to the official launch of the program, CBL engaged with various stakeholders, including the public, to educate and sensitise the population on the currency reform programme, as well as the features of the new currency, and the implementation process.

Eastern Caribbean Central Bank (ECCB)

In the year to 31 March 2023, the value of currency in circulation increased to $1,491.60 million. Banknotes accounted for $1,360.92 million, 91.24%, coins $128.23 million, 8.6%, and digital currency (DXCD) $2.45 million, 0.16%. The digital currency, known as DCash, is now available in all eight ECCB member countries.

The ECCB switched the currency to polymer between 2019 and 2021, and is working to formalise arrangements with a recycling company/agency for the disposal of shredded polymer waste.

The ECCB continued participating in commemorative coin programmes with its international partners, which realised significant receipts in royalties during the financial year.

The ECCB is working to develop its technical capacity to use scientific method of currency forecasting, including data analytics tools and methodology, in collaboration with the Research, Statistics and Data Analytics Department and De La Rue, who prints ECCB banknotes.

As part of the ECCB’s data and digital transformation work and its new ECCB Knowledge and Innovation Hub, it launched an AI Climate Resilience Data Challenge as part of the 6th Growth and Resilience Dialogue with Social Partners, which was held in April 2022.

The ECCB received the 2022 Central Banking Green Initiative Award for its solar canopy project, which is significantly reducing its carbon footprint and operating expenses related to power consumption.

Central Bank of Colombia (CBC)

CBC’s 2022 annual infrastructure report is predominantly a discussion about a possible future Central Bank Digital Currency in Colombia. The report also discusses its 2022 payment survey and cash in circulation.

The survey took part in the first half of 2022 and found that cash use comprised 78.4% of transactions by volume and 74.6% by value. Merchants also preferred cash payments in line with these results.

High denomination notes are the 100,000 50,000, 20,000 and 10,000 pesos. These account for 71% of the number of notes in circulation, with the 50,000 pesos responsible for 49% of the total.

The main low denomination notes are the 5,000 and 2,000 pesos, although there are denominations down to the one peso still in circulation. These denominations account for the remaining 29% of notes, with the 2,000 pesos responsible for 16% of notes.

Coins account for only 2% of the value of cash in circulation.

Between 2012 and 2021 the volume of banknotes increased by an average of 6.6% per year, reaching 3.877 billion notes in total. As a proportion of GDP, cash in circulation averaged 6.9% across this period, although it has been rising. In 2021 cash in circulation as a percentage of GDP reached 9.23%.

Central Bank of Taiwan (CBT)

Currency Demand: At the end of 2022, currency in circulation had reached NT$3,356.8 billion, up 13.85% compared with the year before. As usual, currency issue peaked at NT$3,390.1 billion on 28 January, the last business day before the Lunar New Year holidays.

By denomination, the composition of NT dollar banknotes in circulation at the end of 2022 was similar to the end of 2021. The NT$1,000 accounted for 88.4% of notes in circulation, with the NT$100, 4.59%, and the NT$500, 3.58%, following on.

The ratio of currency in circulation to GDP continued to rise in 2022 consistent with previous years, reaching 12.56%, up slightly on 2021 when it was 11.67%.

Commemorative Coins: In addition to currency issuance, the Bank issues gold and silver coins and commemorative coins for important ceremonies, national holidays, major international events, or other significant national events. During 2022, the Bank issued a casting set of coins for the Chinese Zodiac Year of the Tiger.

A number of advertising campaigns were run to enhance public understanding on the security features of NT dollar notes and coins and to promote the use of circulating currency. CBT also continued to urge the public to help maintain the cleanliness of circulating notes and coins.

Visually impaired: CBT has developed the NT dollar banknote gauge card and instructed the Central Engraving and Printing Plant, its banknote producer, to produce this in significant volumes to meet demand from visually impaired people. CBT also sent relevant personnel to local support groups to promote the use of the card and to distribute it for free to the visually impaired.

Museum: Since 2013 CBT has had a virtual money museum online. In 2020 it upgraded the site, and it now has a virtual exhibition hall so that visitors can browse banknotes from around the world classified into various themes. During 2022, it held an annual exhibition titled ‘The Fertile Land’.