VOLUME 17 – NO 8 / AUGUST 2019 Spectra Launches Machine Green Light for Readable Polymer Substrate G4S Demerger G4s has used its interim results to state that the review of its options for the separation of its Cash Solutions and Security Solutions business, first announced last December, is now complete, and the board has approved the separation. Plans have now been set in motion for the demerger of Cash Solutions in the first half of 2020. According to the company, ‘we believe that will create two strong, focused businesses, each with the clear potential to capitalise on market leading positions and to unlock substantial value for customers, employees and shareholders’. Since last December, G4S has received a number of unsolicited expressions of interest from third Spectra Systems Corporation (Spectra) matching sensors that detect only that parties to acquire parts or all of the – a supplier of covert features and taggant, so there can be no confusion Cash Solutions business, including sensors for the currency industry – has with another country’s banknotes. As one from rival Garda. It states that announced that it has executed a 10 counterfeit banknotes lack the taggant, they it has actively engaged with these year supply agreement, renewable by can immediately be detected in the central parties and will continue to evaluate mutual consent, with a multi-billion bank’s banknote processing systems. proposals alongside the implementation dollar, multi-national, global supplier of In cotton based substrates, the amount of of the demerger plan, albeit with biaxially oriented polypropylene (BOPP) taggant used is generally strictly controlled no assurances that any third party with significant operations in the USA for in the paper production process to match proposals will lead to a transaction. use as a banknote substrate. the number of banknotes produced In addition, G4S stated that it will be According to the company, this polymer and, as the sensors are serviced by the managing for value or exiting a number has the unique property of being machine company supplying the unique taggants, of non-core business (a programme readable, containing a covert (level 3) the total integrity of the system is ensured. it first initiated over four years ago) substance which performs the same It follows that the substrate containing the and implementing further identified verification task as G&D’sM feature (and unique taggant is also strictly controlled operations efficiencies. other such features supplied by De La Rue once produced. For the half year, the company reported and Authentix) in cotton based substrates. The new polymer, which will be marketed an increase of sales by 4.7% to £3.7 These unique level 3 banknote security by Spectra, is UV dull, as is the taggant, billion, and a PBITA of 1.7% to £243 features (generally known as taggants), and maintains the extremely low haze levels million. The Cash Solutions business and the sensors that detect them, are required for the signature window security accounts for around 15% of sales and strictly controlled, being provided only for of polymer notes. It will have the unique 25% of profits. central banks for the verification of their taggant added during the process when the banknotes. Each central bank is allocated BOPP film is produced. a unique formulation of taggant with Continued on page 12 >

www.currency-news.com Cash Management and Procurement - Public or Private? What should be the role of the state Forces for change Further afield, countries such as Chile, in payments, whether a central The forces for change are varied and apply Egypt, India, Indonesia, Mexico, the bank, ministry of finance or treasury unevenly across the world. They include Philippines and South Africa are in the department? Today there is wide a decline in the use of cash as a means process of, or have been, investing in agreement that central banks are of payment, the development of totally new capacity, there is a new quasi state- responsible for payment systems and new payment tools that can work across owned printworks in the UAE and plans for the issue of banknotes Some play borders, and a lack of economic growth banknote production in Ethiopia. a more active role in the currency and political change leading to traditional The printworks in Bulgaria, Kenya and Sri function than others – ranging from full monetary policy being reviewed. Ideas Lanka have all entered into joint ventures control, including production, through such as negative interest rates have been with commercial printers to secure their to complete outsourcing of production, used and are being considered, made local indent and to earn export income. distribution and even destruction, and all more difficult to achieve by the existence of Kazakhstan, Morocco, South Africa, the points between. physical cash. Ukraine and Uzbekistan are reported to How might that change as the world So at one end of the payment spectrum, have carried out work for commercial changes around us? central banks are having to consider the printers, sometimes under formal long term Historically governments have always been fundamentals of how value is held and arrangements, to use their spare capacity. heavily involved in payments and banking. accounted for, and some – having gradually Further east, India’s ‘Made in India’ policy But is all that about to change? extricated themselves from cash functions – has seen approximately 20,000 tonnes are having to become more active to ensure of paper removed from the addressable that cash is not driven out. market, while China Banknote Printing At the other end of the spectrum, what is & Minting, with its vast capacity and a Inside this Issue happening to banknote procurement? declining domestic market, is the latest 1 Spectra Launches Machine It has long been assumed that the historic SPW seeking to win a share of export Readable Polymer model of government institutions running markets, following in the footsteps of Substrate their own state printing works (SPWs) would long-time SPW exporters such as Goznak, PWPW and Note Printing Australia. 1 change with greater use of outsourcing Green Light for G4S and/or privatisation as they progressively Companies such as SICPA and Crane have Demerger retreat from currency management and either manufactured in territory or formed 2 Public or Private? focus on their core tasks. local partnerships to produce in territory, while – along with their printworks – the 3 It has also been long predicted that the locus Declining Demand Hits of the production community would shift state paper mills of Russia, China, Korea, Royal Mint’s Sales away from Europe to the rapidly-developing and Spain (along with France and Italy) are seeking to export paper. 3 People in the News economies of Asia and other parts of the world, and that over-capacity would lead In other words, consolidation has 4 News in Brief also to closures and consolidation. happened, and there have been closures. 5 Whilst some of this has come to pass, some But the hand of the state in production Cash as a Public Good – the appears stronger than ever. Expert View of it has gone in the opposite direction. In Europe, over-capacity was partly caused Whether or not private suppliers are at a 7 MDC 2020 – Call for Papers by so many SPWs gearing up at the end structural disadvantage in this new scenario 8 of the 1990s for the initial production run is not the point of this article. What is 20 Years of Making the significant, however, is that state suppliers Euro of the euro. Following the launch, demand dropped right back. The Belgian and Irish have the support of their governments. 10 40 Years and Still Going printworks have closed, while outside the The commercial sector does not have Strong Eurosystem, so have the SPWs of Denmark that luxury and, although overall banknote and Norway. The Swedish printworks was volumes continue to rise, it can only be 12 Americas Cash Cycle – A privatised, and the Bank of England now a matter of time before the impact of the Revolution in Boston outsources production. In the commercial forces for change affect these volumes. sector, the Dutch printer has exited With nearly 30% of SPWs seeking to export 13 Sound of Intaglio™ – banknotes, the supply side of the industry 21st Century Intaglio banknote production. In Asia, the Bangko Sentral ng Pilipinas is reported to be looking already exceeds the demand for banknotes, Authentication for a buyer for its printworks. reducing prices and margins. 13 Blooming Marvellous But going against those predictions, the More broadly, whether a central bank or a commercial supplier, what might have 14 German printer Bundesdruckerei has IACA Finalists for 2019 been renationalised, there is a brand new appeared a few years ago as a healthy, IACA Coin Awards central bank-owned printworks in Spain, stable payment arena is now facing rapid and significant change. What is the best 15 Note and Coin News the French state paper mill has doubled its capacity and taken in other central banks way to buy banknotes? What is the role of 16 IN Groupe in Negotiations as shareholders, and Italy now has a new the SPW? Time to plan to get the strategy to Buy SURYS state-owned mill. right for the inevitable change!

2 CURRENCY NEWS | COMMENT Declining Demand Hits Royal Mint’s Sales The Royal Mint (TRM), in its 2018/19 For the first time in decades, no new 1 According to TRM, the Currency business Annual Report, described the year and 2 pence coins were produced during continues to face challenges as economies as a transitional one, in a challenging the year. The previous Chancellor of the increasingly embrace cashless alternatives. environment in which demand for coins Exchequer, having announced that the The competition for overseas contracts globally fell. Sales were up by nearly issue of the two lowest denominations was has continued to be intense as more 1.5% to £422 million, but the pre-tax under review last year, confirmed earlier this mints experience low domestic demand, profit of £2.1 million for 2017/18 turned year that their future was safe. The absence resulting in considerable price pressure as into a loss after exceptional items of of production nevertheless led some competitors strive to fill their order books. £3.5 million. commentators to conclude that the coins As a result, TRM has plans to position itself are on their way out. to compete more effectively for overseas In reality, however, following the previous contracts, while protecting its ability to meet year’s introduction of the new £1 coin UK coin demand. and the withdrawal of the old ‘round In the other parts of the company, the pound’, millions of hoarded coins of all Consumer division (which is responsible denominations were returned to cash for collectors coins and medals, historic centres. This huge (and unforeseen) coins, authentication and valuation services, surplus meant no new UK coins of any storage and the visitor centre) performed denomination were needed in the second well, and the Precious Metals division half of the previous year and, for the (renamed from Bullion) even better. TRM last year, no new 1p and 2p coins. The has also set up a new business line - Gifting surpluses at cash centres for the other - which draws on its heritage and also denominations have abated, and did result performed well in its first year. One of the largest drops was in the in demand picking up for the £1, 50p and TRM has said that it has launched a three- Currency division (formerly Circulating 20p coins. Coins), where sales fell by 8.5% to £105.3 year plan with a clear vision to reinvent itself The steep decline in UK coins was partially for the 21st century. The plan challenges million and profits from £5.7 million to a offset by overseas sales of coins and loss of £700,000. This was down to UK everyone in the company to be agile and blanks, which increased from £53.9 million think innovatively, looking at what makes circulating coins, where sales dropped from to £76.7 million. 3.3 billion pieces were £61.2 million to £28.6 million. Over the TRM unique and creating a portfolio of supplied to 31 countries, compare with 2.2 complementary businesses that draw on reporting period, TRM issued 632 million billion the previous year. new coins to cash centres, compared with its core strengths, heritage, design and 1.19 billion the previous year. manufacturing expertise. What this plan actually entails will be revealed during the coming year.

People in the News Maurice A Amon - 1951–2019 Having been involved in a range of roles, The Governor of the Maldives Monetary The industry was saddened to learn of projects and geographies, he culminated Authority, Ahmed Naseer, has resigned the sudden death of Maurice A Amon, of his career in SICPA as Co-Chairman. He after the former head of the bank’s anti- SICPA, on 26 July, at the age of 68. stepped down from a full-time role in 2011 money laundering unit accused him of and remained a member of the Board until attempting to obstruct an investigation. His SICPA was founded by the pioneering early 2019, when he was replaced by his successor has not yet been named. industrialist Maurice Amon in 1927 in son Albert. Lausanne, Switzerland, and expanded globally under the leadership of Albert Amon. Tumi Tsehlo, Managing Director of the Reaching the third generation – Maurice A Eddie Yue has been appointed the Chief South African Mint, is stepping down. The Amon, Monique Cohen-Amon and Philippe Executive of the Hong Kong Monetary search is underway for his successor. Amon – the family business was fully Authority (HKMA) with effect from 1 October. established as one of the flagships of Swiss Currently Deputy Chief Executive, he Burroughs, the US-based supplier of cash industry, and a global leader in the domain replaces Norman Chan, who is retiring. handling equipment and services, has of secured authentication, identification and named Anson Martin as its new CEO. traceability solutions and services. The Central Bank of Iceland has chosen the He replaces Ed Boyd, acting CEO, who Maurice A Amon joined SICPA in the economist Dr Ásgeir Jónsson as its new stepped into the position on an interim basis mid-1970s. His exploratory spirit and risk Governor, to succeed Már Guðmundsson. last year following the retirement of the capacity had contributed significantly to former CEO, Andrew Lawson, and who business developments overseas, notably now becomes Chief Operations Officer. in the US in 1980s and Asia. He was The Turkish government has dismissed the recognised for his vibrant personality and Governor of the Central Bank of Turkey, creative drive within the currency world. Murat Cetinkaya. He has been replaced by former Vice Governor Murat Uysal.

COMPANY NEWS | VOLUME 17 – NO 8 | AUGUST 2019 3 News in Brief New Printing Line for India Under the agreement, Westpay will Croatia Gears up for Euro supply Loomis with payment solutions for The Indian government is investing Rs Croatia has launched a bid to join Europe’s cashless, so called card present, on-site 250 crore ($35 million) in a new printing Exchange Rate Mechanism II, the two- transactions based on its Carbon range of line at the Currency Note Press (CNP) in year waiting room for eurozone candidates payment terminals. Nashik, which will increase capacity by which pegs their currencies to the euro. ‘The partnership allows us to reach new a further 1 billion to 7 billion notes. The Zagreb hopes to join the ERM II mechanism markets, and will enable Loomis’ customers new line will include equipment for paper in mid-2020 and could adopt the euro three to benefit from unified and improved cutting, intaglio, numbering and other years later at the earliest, replacing the kuna management of payments, regardless if its printing processes. which has been the country’s currency cash or cashless,’ said Sten Karlsson, CEO CNP is one of two printworks owned by since 1994. . of Westpay. Security Printing & Minting Corporation of A letter of intent to join the mechanism India (SPMCIL), and produces banknotes Luminescence Sun sent to the eurozone countries and EU and other security documents, as well institutions, signed by the Finance Minister as coins. During the period following the Chemical Meets Anti and Governor of the Croatian National demonetisation of 2016, CNP Nashik Corruption Standard Bank, was accompanied by a plan for was at the forefront of printing the new Luminescence Sun Chemical Security has reforms Croatia will undertake before banknotes, including the Rs 500. Last received the ISO37001:2016 certification entering it, a statement said. month, it started printing the new Rs 20. from the British Standards Institution Croatia is the newest member of the Three companies have already secured (BSI). This is a relatively new international European Union, joining in 2013. Bulgaria, contracts for the new equipment, with the standard which specifies a series of which joined the EU in 2007, started the new line expected to be operational within measures that can be implemented to same process last year and could join the a year. help prevent, detect and address bribery, eurozone in 2022. enabling an organisation to successfully Note Issuing implement an anti-bribery management New Service Bank to Rebrand system. Luminescence Sun Chemical Security is understood to be the second Centre for NCR Clydesdale Bank, one of the three note company in the industry to have received NCR Corporation has opened a new Center issuing banks in Scotland, will be rebranded the certification. of Excellence (CoE) for services in Kuala as Virgin Money by the end of 2021. Lumpur. The facility, which consolidates ‘Even though we already worked to the CYBG, the owner of both Clydesdale and three separate locations, will be NCR’s highest standards, it is still important to Yorkshire Banks, agreed to buy Virgin services hub for the Asia Pacific region, be able to show that our processes and Money for £1.7 billion last year. Rebranding serving the banking, hospitality and procedures are verified by an organisation the group as Virgin Money, rather than retail industries. as BSI’, said Gerben van Wijk, Sales and keeping the existing brands, was decided Marketing Director. ‘The ISO certification According to NCR, the new centre on as a way of capitalising on the national process by BSI is very strict and enabled will enable it to quickly introduce next- image of the latter, as it was thought us to have a thorough internal check to re- generation services that keep commerce that the localised names of Clydesdale confirm we are on the right track. We highly running for both large, global brands and and Yorkshire were a barrier to growing recommend other organisations in the local neighbourhood businesses. The as a national brand hoping to challenge security printing industry to do the same’. CoE houses 400 multi-lingual service traditional banks. professionals to provide round-the-clock One of the advantages to Scotland’s three Brinks’ New ATM Solution customer support in 12 Asian languages, note issuing banks of issuing their own for France and includes a disaster recovery centre banknotes is brand recognition (effectively located in Petaling Jaya, ensuring advertising) and Clydesdale Bank, which Brink’s France is launching a new ATM business continuity. dates back to 1838, has a very strong solution whereby it installs and operates ATMs and charges a fee to the municipality. ‘This centre delivers service excellence local presence in Scotland. Presumably for complex, digital transaction networks, recognising this, CYBG B has confirmed The cost is estimated at €1,500 per month but can be lower depending on the number supported by Malaysia’s reliable that Clydesdale banknotes will be spared infrastructure, strategic location and its the rebranding. of withdrawals. To reduce costs, Brink’s is offering basic ATMs with a simple cash- diverse, multilingual talent pool using our Digital Connected Services platform,’ said Loomis Partners out function. The first unit was installed in Brittany, in western France, in July. Bill Bancroft, Senior Vice President, Global for Cashless Services Delivery. France has seen the number of ATMs Cash handling specialist Loomis has signed drop by 5.3% between 2015 and 2018, a four year agreement with fintech company according to the Banque de France, which Westpay to bring ‘world class digital is undertaking an Access to Cash review. payment services and solutions to retail And while it says that there is no overall customers initially in Finland and Sweden issue with ATM distribution, as 99% of the with an intention to incorporate in rest population can still reach an ATM in less of Europe’. than 15 minutes by car, there is a risk that remote and rural communities may face a ‘bank desertification’.

4 CURRENCY NEWS | NEWS IN BRIEF Cash as a Public Good – the Expert View A couple of weeks ago, Cash Matters, the Currency News™ spoke to both to find out Finally, we have made all our findings pro-cash movement of the International more about the work of the IMFTI and the public – this is a core value that comes from Currency Association (ICA), published new white paper. being part of a public research university, the white paper ‘Virtually Irreplaceable Q: Professor Maurer, what prompted you to but also makes a difference insofar as – Cash as a Public Infrastructure’ by Dr found IMTFI in 2008? other organizations and companies often Ursula Dalinghaus, making a case for conduct work under nondisclosure or BM: Big changes were afoot in the world of how and why cash must be understood confidentiality agreements. money and payments in 2008. The global as a ‘public good’. financial crisis, the rise of smart phones, Q: What is the main focus of the institute? and, in Kenya, the mobile payment service BM: We want to understand how people’s M-Pesa, all focused people’s attention, diverse interactions with money are being across a range of fields and professional reshaped by new technologies, from new locations, on the intersection of money and payment platforms to things like artificial new technologies. intelligence in providing financial advice We founded IMTFI to bring the perspective or in creating alternatives to traditional of on-the-ground research about the credit scores. everyday money lives of people around But, again this is crucial, we focus on the the world, to help researchers, nonprofits user side of the equation, on people’s and policy makers understand the actual interactions with money and these profound impact that technology was technologies, down to the level of questions having on people’s saving, spending and like, where do they keep their money, and payment behavior. why? What does their daily transactional life We also wanted to ensure that folks in look like? What are the diverse systems and the policy and economic development beliefs that inform their money practices? communities heard the voices of people We developed the concepts of monetary from the places most impacted by these ecology and monetary repertoires to capture Ursula Dalinghaus. technological changes. Too often it seemed this people-centered approach to money like international workshops and conferences and technology. Dr Dalinghaus, Visiting Professor of were attended by the same set of speakers Anthropology at Ripon College, is also an Q: IMTFI was initially funded by the Gates and the same organizations. We wanted affiliated scholar at the Institute for Money, Foundation, major supporters of the Better to get research funding into the hands of Technology & Financial Inclusion (IMTFI), than Cash Alliance. The IMTFI is neutral people actually from the countries where University of California at Irvine, which has when it comes to payments; however, there things like mobile money deployments made itself a name as one of the leading is an increasing focus on cash. What caused were taking place. The idea was to create a institutes when it comes to the role of money this development? global brain trust of new experts on money, in people’s daily lives and practices, and to BM: We realized pretty quickly that there technology and financial inclusion. the best way to go about financial inclusion. were a couple of very general things going Q: What makes IMTFI different from other The Director of the IMTFI is Professor Bill on, almost everywhere around the world. institutions or university faculties? Maurer, Fellow of the American Association First, most of the new mobile money for the Advancement of Science, Fellow of BM: The big difference, which always systems in which the Gates Foundation was the Filene Research Institute, Dean of the surprises people in this space, is that we initially interested as potentially banking the School of Social Sciences and Professor of are mainly anthropologists. Even though unbanked were in fact serving as payment Anthropology at the University of California, we have supported many experts from rails – not as means of saving but as a Irvine. He will also be one of the keynote other academic fields over the years – means of moving money. This made us speakers at the ICA’s Global Currency Forum design researchers, computer scientists, focus more and more on payment systems 2020 in Barcelona. or economists – we always try to instill an as a distinctive area of research. anthropological sense. Second, pretty much universally, we found We also provide training in anthropological that new systems were not replacing old methods, like ethnographic research, ones; they were instead being added into to help them get at what is really going the mix. People would use one payment on in people’s lives around money and method for one kind of transaction, and technology. For instance, survey researchers other payment methods for others. But had reported that some people in Kenya nothing was replacing anything else. I think were using M-Pesa to pay school fees. Our a lot of people initially thought that things like research found that, sure, they were paying mobile money would displace cash. Instead, school fees, but often the funds were first mobile money became a way for people routed through coming-of-age rituals and the more efficiently to move money and access purchase of livestock as gifts marking stages it in the form of cash. in the life course. There is so much more Q: Dr Dalinghaus, you just published the going on than what people will tell a (usually study ‘Virtually Irreplaceable – Cash as a foreign) survey researcher. Public Infrastructure’ for Cash Matters. You For another thing, we try our best to maintain are a Visiting Professor of Anthropology at an objective perspective on the phenomena Ripon College but kept up your work as an we study – we don’t come at things with a affiliated scholar with IMTFI. What makes pre-determined agenda. This sometimes working with IMTFI so special? Bill Maurer. makes people uncomfortable. Continued on page 6 >

ON THE RECORD | VOLUME 17 – NO 8 | AUGUST 2019 5 Cash as a Cash as a Public Good (Continued) US: One of many aspects that make working Cash increasingly gets discussed as a with IMTFI so special is being part of a passing form that will eventually be replaced Public Good community of research practice that has by digital, if not soon, then sometime in the ‘Virtually Irreplaceable: Cash as always prioritized grounded research in the distant future. In contrast, this paper shows Public Infrastructure’ is the second local communities of our researchers. that physical cash is irreplaceable. study from Cash Matters, the Over the past decade IMTFI has built up One reason is that people value the ability first - ‘Keeping Cash – Assessing a tremendously rich and incredibly diverse to choose from multiple payment forms. the Arguments about Cash and archive of evidence on the multifaceted Another, even more substantial argument for Crime’ - having been published ways that communities in the global cash, is that the cash infrastructure serves in September 2017 to general South have integrated new digital and a vital public role since cash can circulate acclaim. mobile money technologies with traditional independently of its issuer and it can This latest report takes a close look monetary practices. work offline. at the role of cash in society, drawing This careful research collected over time Evaluating the historical and cross-cultural on the IMFTF’s expertise in cash and has been tremendously important for evidence on how people use physical digital monetary technologies and developing a more systematic understanding currency, it is clear that there is something the latest research across policy, of the use cases people see for cash. It is crucial about the materiality of cash as a industry, and academic sources publically accessible in a variety of formats, distributed form, which allows it to be part to highlight the particular qualities from blog posts to working papers, and of such diverse practices, financial, political, of cash that have so far been now a new edited volume, ‘Money at the and social. Precisely this flexibility is what overlooked in discussions about a Margins: Global Perspectives on Technology, makes cash indispensable as a public future payments landscape. Financial Inclusion’. medium that everyone in society can use The paper comes to the IMTFI is also unique in starting with empirical and access. following conclusions: and theoretical insights from the global However, as this paper also shows, cash as Cash guarantees ease of use, South to generate new questions for our a public good depends upon legal mandate, accessibility, privacy, and many research on money in more developed good governance, guaranteed access, and other unique qualities in local, markets in the global North (rather than technological support in maintaining the national, and global monetary only the other way around, as is so often cash infrastructure as a vital part of wider systems. Cash fulfils both criteria for the case). payment systems. a public good: it is non-excludable For example, insights from the global South Q: What developments in the payments because its function as a means of have sharpened our understanding of the landscape do you see when you draw on payment, of transfer of value, works role that cash denominations play across IMTFI’s field expertise and research on a without compensation. And it is the globe as a budgeting tool, a means of global level? non-rivalrous because its use by differentiating the meaning and intent of a BM: Payments have been going through one person does not preclude its money gift, or the importance of national what we’ve been calling a ‘Cambrian use by another. currency denominations as a communicative Explosion’ for almost a decade now. The Cash is public – the only form medium for efforts to promote universal Cambrian period in geologic time was of money not controlled by a access, equity and inclusion (such as recent characterized by an amazing proliferation private, profit-driven entity. Once redesign proposals of particular banknotes in of different forms of life on planet earth, in circulation, it is the only form of Canada, Australia, the UK, and the US). occupying different niches and with an payment independent of its issuer. To underscore IMTFI’s signature approach, incredible variety of body forms. We’ve It is deployed not to make a profit the concepts of monetary ecology and been in the middle of something similar on its transfer but to support and monetary repertoires are extraordinarily with payments. sustain value transfers free of productive tools for research and teaching Think about all the new ways to pay charge. on the user experiences of payments that startups and established payment Cash enables personal freedom broadly. By drawing attention to the companies have created just in the past and self-determination – state- complementarity of payment tools from a few years, from tap and pay cards to issued physical cash is a distributed user perspective, we can see how cash is biometric-ID secured mobile payments, public infrastructure that allows a crucial part of practical as well as social to Venmo or WeChat Pay. They all use citizens and users to create a space transactional worlds and of strategies for different technologies; they use different outside the state. At the same risk diversification. interfaces; they often sit on top of different, time, cash acts as a claim upon Q: What is the key takeaway of your white existing payment rails; or they are trying to central banks and, ultimately, states paper on cash as a public good? build entirely new ones, like some of the to ensure good governance of UD: That physical cash will continue to developments in the cryptocurrency space. monetary and payment systems. have a vital and complementary role to play The big question for us is: what sticks, and The materiality of cash is vital to alongside digital well into the future, not what doesn’t? Who uses which of these many social practices. The role only as a method of payment but also as a technologies, and for what purposes? cash plays in social relationships democratizing force – an important form of How do all of these new things fit into often hinges on the physical design power-sharing between issuer and user that people’s existing behaviors around money of cash, such as denomination, is distinct from digital-based money. and payment? which makes cash particularly useful for budgeting, accounting, gifting, or saving. The report can be downloaded at www.cashmatters.org.

6 CURRENCY NEWS | ON THE RECORD MDC 2020 Q: What is your recommendation to As Bill has already pointed out, people use banks, politicians and governments when different technologies for different purposes, – Call for it comes to payments in general and cash and those purposes may only become in particular? apparent through tracking a wider circuit BM: Above all, they need to realize that of transactions and practices over time. Papers This dimension of payment method usage there is no one size fits all payment solution. A ‘Call for Papers’ has gone out for is rarely captured in current cash payment People will always use different technologies the next Mint Directors Conference studies and is difficult to learn through survey for different purposes – Venmo with friends (MDC). which takes place 26-29 April methods alone. Incorporating qualitative data and for the rent, debit cards for groceries, 2020 in Cape Town, hosted by South collection tools can help here. credit cards for more expensive purchases African Mint. like appliances, PayPal online, etc. etc. Understanding payment diversity at the The programme will have a specific micro-level is also relevant for policy making First, there is a virtue in recognizing how theme on each of the three days – at the level of monetary and fiscal policy. For people use payment diversity to achieve their starting with Global Challenges, moving example, there is growing evidence from a different goals. to New Horizons, and then debating variety of corners that people turn to cash as Second, they have to remember that, unless Future Opportunities. a means of curtailing growing indebtedness, you use cash, you have to pay to pay, and some of which is the result of fees and costs The structure of the programme will be that sometimes this fact erects high barriers associated with digital payments. modular, with plenary sessions on each for the poor and underbanked. In many day covering the big issues, streamed This is not only important for the poor circumstances cash remains the best option. sessions focusing on the collector, and underbanked but also, for example, It’s the cheapest for the user, it’s portable, circulation and bullion markets, and then for college and university students it’s private… Not everyone on the planet is a interactive break-out workshops diving burdened with mounting student-loan well-off professional working in a clean office even deeper into specific topics. with job security. debt repayments. Ensuring diversity of payment, and the resilience of the cash Proposals are being invited for We need to design payment for all people, infrastructure in particular, will be crucial in presentations in the following areas: in all kinds of circumstances – some of addressing growing policy concerns about Collector coins – innovation, legal which will unfortunately become more unsustainable debt relations and inequality, tender status, designs and trends, and more common in the years to come, which also prevent people from participating creating a successful secondary such as refugees fleeing political violence in the wider economy. market or environmental devastation caused by climate change. A related point is that when people hold or Bullion – creating an ethical business use physical cash, there remains a concrete model, the investment case Policy makers and governments should bridge and access point to monetary always ask themselves: what if things go Circulating coins – the note/coin authorities and state institutions that is wrong? From a data breach, to massive boundary, seigniorage, optimising the important for public accountability. In my disruptions in politics and society, to denomination mix research I have observed how physical infrastructural or electrical grid failures: Technology and innovation – materials, cash and tangible money objects facilitate how will people pay? How does ensuring design and production, quality communication between central banks and a diversity of payment – kind of like control and inspection, processing, the public on complex policy issues and biodiversity in ecological systems – ensure authentication, marketing financial education. human resilience? Tools and techniques for creating the Sharing cash hand-to-hand is a form of In addition to the policy considerations next generation of coin enthusiast UD: knowledge sharing accessible to all, just like outlined in the paper, I would argue a physical book can be shared, borrowed, Case studies of successful coin for a more nuanced discussion of and passed hand-to-hand to others whereas campaigns payment choice. digital books are often encoded to prevent Corporate social responsibility – When it comes to measuring and collecting sharing across users and devices. So while making the industry and its products data on cash usage and cash in circulation, both physical and digital forms promote clean, green and ethically responsible researchers and policy makers should dig knowledge sharing, they do so in different According to Ross MacDiarmid, CEO of deeper into the data and ask different kinds ways and with different implications for the Royal Australian Mint and General of questions to better understand and ownership and access. Secretary of the MDC, ‘as in industry we capture payment diversity. Comparing the Cash is particularly important for people’s are in a period of change – even, some number and percentage of transactions of agency and self-determination because would say, uncertainty. Hence the slogan different payment methods is important but it can be used, shared, and exchanged for MDC 2020 – Global Challenges, does not necessarily add up to a definitive independently of citizenship status and New Horizons, Future Opportunities. statement on a hierarchy of consumer across jurisdictional boundaries. We will be examining these challenges payment preferences, certainly not one that and their impact on our industry, but supports an argument for a cashless future. Institutional actors should therefore be mindful of how cash is already an effective also coming together to forge a path for part of their public mandates while working coins in the future – whether as a means to ensure greater inclusion, transparency of transaction, a store of value, a token and resilience of financial systems that work of national pride or an investment for better for everyone in society. future generations.’ The closing date for proposals is 31 October. More information can be found at www.mdc2020southafrica.com

VOLUME 17 – NO 8 | AUGUST 2019 7 20 Years of Making the Euro 20 years ago the designs for the new capital with it in proportion to their GDP and Today the Belgian and Irish CBPWs have euro were first unveiled, ahead of population (the so-called capital key). The ceased, or are ceasing production, as has the launch of the new banknotes and banknote requirement is assigned in line the Dutch private printer Enschedé, while coins at the start of 2002. Since then with this capital key. Although the NCBs the privately-owned French printer Oberthur there has been a design change with have to pay the cost of the supply, the Fidicuaire is now an accredited supplier. upgraded security, the Europa series, seignorage associated with that supply is Bundesdruckerei has been taken back into which began in 2013 and completed this returned to them. state ownership and in Spain, in addition year. The euro is now an established The ECB sets the specification and to FNMT, there is a new printworks directly world currency. Although the 2019 supplies origination tools for production. owned by the central bank. De La Rue has euro production figure is 3.7 billion It accredits suppliers of all the elements not maintained its euro accreditation and banknotes, down from its peak of just of the banknotes against laid out security, so no longer participates in tenders. On under 11 billion in 2009, its annual quality, environmental and health and the other hand, PWPW – a state printer in production volume remains substantial. safety standards. The standards and another non-Eurosystem country (Poland) The production, issue and management quality of notes produced are maintained now has euro accreditation and does. of the euro employs a significant number by the ECB and the NCBs working in The situation with paper mills has also of people around Europe and it is an close collaboration. changed. For Euro Series 1, there was just important industry in its own right. Changing manufacturing landscape one central bank-owned mill (CBPM) in To mark the 20-year milestone, this article France and one state-owned mill (SPM) in In 2001, 11 countries were members of the charts the history of the management and Spain. Both of these paper mills continue Eurosystem, with eight of these having their procurement over the past two decades to produce, albeit with investment and own state printing works, owned either by up until the present day Eurosystem of 19 changes to their legal structures, joined by the NCB (CBPW) or the government (SPW) countries (ie. the EU members which have PWPW and Valoridicarta (a new venture – namely France, Italy, Greece, Austria, adopted the euro), and the impact this has between the Bank of Italy and the state- Ireland, Spain, Portugal, Belgium. (The had on the supplier landscape. owned non-banknote printer IPZS), which distinction between whether the printworks have also been accredited to manufacture Who makes the euro? were/are owned by the NCB or another euro paper. The European Central Bank (ECB) has the government agency or ministry is an sole right to issue banknotes within the important one, as we will see later). In the private sector, the qualified paper suppliers were Louisenthal, Arjowiggins Eurosystem and it establishes the annual In addition, there were three private Security, VHP, Fabriano, Landqart, De La production requirement. The responsibility sector printers within the Eurosystem Rue and Crane Currency. There have been for supplying the ECB with those banknotes countries accredited to supply the euro far-reaching changes since then among lies with the National Central Banks (NCBs) (Giesecke+Devrient, Enschede and these suppliers – Arjowiggins Security has of the Eurosystem. The ECB is able to Bundesdruckerei), and one outside (De gone into liquidation, while the others – with function because NCBs have lodged La Rue). the exception of Louisenthal – are all under new ownership. Eurosystem Countries (and Date of Joining) CBPW/SPW CBPM/SPM Private Printer Private Paper The changes in commercial paper and print manufacturing have happened for a variety Austria (1999) OeBS of reasons, but the underlying industry Belgium (1999) challenge has been increased competition at a time of reducing volumes across the Cyprus (2008) world. The causes of those are for another Estonia (2011) article. The declining euro production Finland (1999) volumes are, of course, a part of that story. France (1999) Banque de France Europafi Oberthur Euro procurement: the legal structure Germany (1999) Bundesdruckerei G+D Louisenthal The ECB must comply with European Greece (2001) Bank of Greece Union (EU) procurement law. In the run Ireland (1999) up to the launch of the euro, the NCBs were responsible for producing the Italy (1999) Bank of Italy Valoridicarta Fabriano whole of their national requirement. This, Latvia (2014) whilst not compliant with that law, was Lithuania (2015) allowed through a formal derogation decision in order to ensure that the launch Luxembourg (1999) proceeded smoothly. Malta (2008) Crane (yet to qualify) For subsequent production, this changed Netherlands (1999) VHP to a decentralised pooling system, Portugal (1999) Valora where the entire annual production requirement was pooled and each NCB Slovakia (2009) allocated responsibility for producing Slovenia (2007) specific denominations. Spain (1999) FNMT / IMBISA FNMT In 2004 the ECB issued a guideline that Non Eurosystem Countries said that by 1 January 2012 a ‘common Eurosystem competitive approach to Poland PWPW PWPW tendering should apply to the procurement Sweden Crane of euro banknotes.’

8 CURRENCY NEWS | SPECIAL FEATURE Following this guideline, the ECB What have NCBs chosen to do established what was known as the Single under the EPPS? Eurosystem Tender Procedure (SETP) Prior to the establishment of the EPPS, Euro with the intention that all would transition there were already two tendering groups of to it by 2012. Under the new system, the NCBs who did not have their own CBPWs. Procurement: production allocated to those NCBs without In 2008 the Dutch National Bank took in-house printing works, or which did not the lead on behalf of a number of other the Legal use SPWs, had to be tendered. NCBs to set up the cooperative purchasing NCBs with in-house printing works (ie. group JET (Joint European Tender), and Structure the Bundesbank started tendering for CBPWs), or which used SPWs, could In 2004 the ECB issued guidelines its banknotes. This continues and new choose not to participate in the SETP, in to establish a process and timeline members of the Eurosystem have had the which case their printing works continued to to regularise Euro procurement. choice of whether to run their own tenders produce the share allocated to these NCBs, ECB/2004/18 said that from 1 or to join one of these groups. but could not produce for other Eurosystem Jan 2012 a ‘common Eurosystem NCBs. Alternatively, NCBs could choose competitive approach to tendering to participate in the SETP, in which case Tendering group : JET Cyprus, Estonia, should apply to the procurement of their allocated share of production (as with Finland, Lithuania, Luxembourg, euro banknotes.’ This was followed those of NCBs without in-house printing Malta, Netherlands, by ECB/2011/3 in 2011 where works or which did not use SPWs) were Slovakia, Slovenia the Governing Council of the ECB to be tendered through the SETP. In such Tendering Germany, Latvia postponed the start of the single cases, CBPWs or SPWs were then free to group: Bundesbank Eurosystem tender procedure until 1 tender for and produce euro banknotes for In-house NCBs France, Greece, Jan 2014. other countries. If and when such NCBs Italy, Spain chose to participate in the SETP, however, In 2013 in ECB/2013/49, the In-house Group Austria, Governing Council decided the single their decision was irreversible. In the event, Belgium, Portugal no central bank with a CBPW or SPW other Eurosystem would start on a date to TBC Ireland than the Bundesbank went to tender. be set by it owing to a change in the assumptions on which the expected Since 2004 there have been a series of The NCBs with CBPWs, meanwhile, have split into two groups. single Eurosystem tender procedure new guidelines which initially delayed the start date had been based. Namely the deadline, then removed any timescale First are in-house NCBs. In Greece, the market had become more competitive and, finally, introduced a new procurement NCB continues to place its indent directly since 2004 and there was no process that does not require competitive with its CBPW. perceived advantage in using the single tendering as envisaged in 2004. The France, Spain and Italy have all gone Eurosystem tender procedure. ECB’s core principles were that whatever a different route. The EPPS’ General In 2014 the ECB issued its procurement system was adopted, it Principles stipulates that, if an in-house must maintain: ECB/2014/18, guideline for the NCB with its own CBPW chooses to establishment of the EPPS. The Key

Continuity of supply; co-operate with other NCBs, it is required concepts of the EPPS are the twin Internal know-how within the ECB; to establish a ‘separate legal person’ to pillars of In-house NCBs and Tendering establish control and less than 20% of its Foster competition; Group NCBs. In the General Principles activities should be on the open market. Reduce costs; laid out in Article 3, it stated, ‘NCBs This has led to a number of changes in the that do not have in-house printing

Take advantage of private and public legal structures of state-owned printworks works shall be part of the tendering innovation. and paper mills (both central bank and group.’ If an In-house NCB chose to The ECB stated in 2013 that the market government owned) in the Eurosystem. co-operates with other NCBs, it was had become more competitive since 2004 So, for example, as reported in the January required to establish a ‘separate legal and there was no perceived advantage 2019 edition of Currency News, the Banque person’ to establish control of the In- in using SETP. As a result, it was de France has set up a wholly owned house NCBs and that less than 20% announced that a Eurosystem Production subsidiary, Europafi, for the production of of its activities should be on the open and Procurement System (EPPS) was euro paper. In 2017 the NCBs of Austria, market. There was a further document, being considered. Ireland, Italy and Portugal took minority (EU) 2015/280 document, relating to The new EPPS is based on two key shares in it. the establishment of the EPPS. concepts, the twin pillars of In-house NCBs In Spain, the SPW (FNMT) is not owned Most recently, there was the and Tendering Group NCBs, and this has by the NCB. Hence the Banco de España ECB/2017/31 guideline amending (EU) now been adopted. has created a new printworks, known as 2015/280. The main change is Article As noted earlier, within the Eurosystem IMBISA, in which it has an 80% share. 6, paragraph 3, ‘…an NCB that closes members, the ownership of print works And last month, Currency News reported its in-house printing works may decide and paper mills is not uniform, some being on the creation of Valoridicarta SPA by to remain part of the in-house group on owned by the NCBs and some by other the Banca d'Italia to produce euro paper condition that it participates in non- government institutions. This added to the and holograms. institutional cooperation on the basis complexity of creating the legal framework Second are in-house groups. In 2017 an of a cooperation agreement with the for the procurement of the euro in the ECB guideline amended (EU) 2015/280 meaning of Article 8’. early days, which is not covered here. The so that ‘an NCB that closes its in-house complexity carried through to SETP and printing works may decide to remain part of to the EPPS, which addresses this with its the in-house group…’ requirements for a separate legal entity and the requirement for co-operation, which is Continued on page 11 > discussed below.

SPECIAL FEATURE | VOLUME 17 – NO 8 | AUGUST 2019 9 Intergraf and Security Printing – 40 Years and Still Going Strong The printing federation Intergraf has run Parallel to this, Intergraf runs a security As for the changes we have experienced in security printing conferences since the printing section that provides targeted all these years, companies have no doubt 1970s – arguably making it the first in services to the global security printing become increasingly specialised, focusing the field. The next event will take place community. It is this team which organises on certain products. On the other hand, the in Copenhagen this October. Currency SecurityPrinters.Banknotes+Identity, to market is now more concentrated, with ever News™ spoke to Beatrice Klose, offer security printers, suppliers and end larger international organisations emerging Intergraf’s Secretary General, about the customers a platform where they can as a result of mergers and acquisitions. event, how it compares with all the other proactively engage with the most pressing This evolution actually reinforces our belief events in the industry, and how Intergraf issues in the banknote and identity that producing an event that spans both is ensuring that it remains relevant in world today. banknotes and identity – two interlinked an age of increasing digitisation of And, of course, Intergraf also plays a pivotal sectors – is indeed the right approach. payments and secure documents. role in defining and developing standards Q: The security printing industry is for the industry. We set up our first CWA decreasing in size as digital replaces Certification in 2001. CWA for Suppliers physical – eg. cheques, tickets, vouchers, followed in 2005 and eventually the ISO and even cash are threatened. How do 14298 Standard in 2013. you equate this decline with so many Q: Intergraf at one time held the only major conferences, and what is your own conference for the security printing industry. attendance experience over the years? Now there are multiple conferences both A: The importance that Intergraf places regionally and globally. How have you on hand-picking its audience cannot managed to keep the Intergraf conference be overstated. We screen every single viable during this challenging period? What company or organisation wishing to attend changes have you experienced? SecurityPrinters in order to ascertain it A: Intergraf’s SecurityPrinters. truly belongs to the banknotes and identity Banknotes+Identity has a long-standing world. There are no exceptions: everyone history. We were the first to put together must provide solid references and/or an event for the industry. Back in 1976 product samples before they can be invited my predecessor already felt the need for to join the conference or exhibit. This more detailed discussions between security guarantees that our delegates do feel in the printers. The questions on the table then right company. Beatrice Klose. were mainly technical, ranging from the use Attendance has been stable over the of machinery to paper specifications to the past decade and we feel that 800-900 Can you tell us briefly about your Q: application of security features, but they participants is the optimal size given career to date, both before and since were clearly of relevance: over 80 delegates our objectives and the networking joining Intergraf. made the trip to Milan to attend that first opportunities we aim to offer. Rather than A: Originally from Germany, I studied conference. And this is how it all started. increasing numbers, we prefer to maintain Business Administration, European Studies Then an exhibition was added to the event in high standards. and International Management in both 1992 and each edition now draws together The disruptive influence of digital German and French universities, and 800-900 industry professionals. technologies is felt across the two fields lived in the US and France before moving The conference market has certainly grown we cater for: banknotes and identity. And to Belgium. In 2001 I joined Intergraf in considerably. There are other events that the opportunities that arise from the digital Brussels and took over as Secretary target the same audience, but Intergraf’s age, as well as the challenges and risks, are General two years later. Prior to that, SecurityPrinters stands out by remaining similar for professionals across the sector. I worked for Honeywell in the US and focused on the quality of its content. We We are therefore convinced that they can Mannesmann, a German company, in its make every effort to produce attractive learn from each other. Brussels liaison office. agendas that are completely free of Q: Content is key, so how do you go about Please give us an overview of Intergraf – marketing talks or sales pitches. Q: creating the programme for the event? its activities and membership. Beyond content, Intergraf’s neutrality as A: We work with a Committee of Experts Intergraf is the European association an organisation is reflected in the overall A: composed of senior banknote and representing the interests of the printing structure of the event. It enables us to identity professionals from the industry, industry. Our members are European maintain lower registration fees and, just as central banks and law enforcement. Their national printing federations. We work important, to grant central banks, ministries combined knowledge and vast experience together, with the European Commission, and law enforcement reduced fees that not only help us steer the event in the right to support the competitiveness of the better match their limited budgets. For direction but to maintain an objective and sector. We do this by advocating, informing printers, as for suppliers, our exhibition neutral approach to programme building, and networking. Environmental as well as is also the perfect interactive platform to without missing out on any important or standardisation and social issues lie at the launch or promote products and solutions. interesting development. Months before heart of our day-to-day activities. This, I believe, is where our strengths lie as programme discussions start, we also issue a not-for-profit association. a call for papers so that our scope remains as broad as possible.

10 CURRENCY NEWS | ON THE RECORD Making the Euro (Continued)

When Belgium closed its CBPW it chose this option, and so Austria and Portugal Q: Can you elaborate on any particular Q: Do you envisage the day when there themes or highlights of the conference – will be virtually no security printing? have joined with Belgium to amalgamate their euro indent and to allocate production both in terms of the content, and also the A: From my experience within commercial broader event? between the two CBPWs without having printing, it seems rather difficult to to tender. It is thought, although yet to be A: We have parallel sessions that imagine. The notion of a paperless office confirmed, that Ireland may join this group. delegates can choose from, from morning was first introduced in the late 1970s – 40 to afternoon, to gain a better overview years down the line, we are using more The implications of the EPPS of advances in their respective fields of paper than we did back then. for banknote paper and print production interest: banknotes or/and identity. Of course, we all want to make the best When in 2014 the ECB, while meeting End customers such as ministries and use of new technologies. And they do, the requirements of EU procurement law, central banks always feature prominently more often than not, simplify accessing suggested the EPPS, it was based on in the programme. But we also take extra or help managing data. However, two five core principles. Reducing costs and care to allot law enforcement enough time major risks immediately spring to mind: encouraging competition were only two of to report on the most recent breaches. data can be hacked and natural or those five. Since then euro volumes have man-made disasters can result in power This time, the event will take place at the fallen steadily to less than half the annual cuts. As long as such risks cannot be Bella Center in Copenhagen, Denmark long term average and other market forces completely eliminated, physical products on 23-25 October 2019, and the topics and changes have reduced the number of will still be needed to safeguard a will be technical as well as market related. both state and commercial suppliers. At the country’s economy, its borders and For example, the Banknote High Security same time there has been significant capital domestic security. Meeting that takes place immediately investment in some CBPWs and CBPMs, before each edition of SecurityPrinters – Q: How is Intergraf gearing up for an and new partnerships amongst NCBs. by invitation only – will address, among increasingly digital future – both in It will be interesting to see whether the goals others, the trade of counterfeit money value and ID documents? Do you see of the EPPS are achieved satisfactorily for on the darknet, the challenges facing opportunities here and, if so, what? all stakeholders as cash usage and market central banks with the cash cycle, A: SecurityPrinters has come a long way dynamics change in the years ahead. substrate considerations, and recent since its inception over 40 years ago. It criminal investigations. has evolved in line with the needs of its Euro Production Volumes Post-Launch And, judging from what we hear from audience and it will continue to do so. YEAR VOLUME (MILLIONS) our delegates, our social programme is Digital solutions for print products are always one of the highlights of the event. widely used in the commercial printing 2019 3,378.00 Intergraf’s team goes the extra length world. They are on offer from most 2018 3,989.90 to create the right environment to foster printers globally. It is very clear to us 2017 5,723.00 synergies, where delegates can keep on all at Intergraf that security printing is networking well beyond conference and equally preparing for a digital future 2016 6,217.00 exhibition hours. and digital topics are very much on our 2015 6,000.00 Q: What do you see as the key agenda. Covering both banknotes and 2014 8,345.00 differentiators between Intergraf (both identity gives us the edge because both 2013 8,000.00 the broader organisation and the segments of the sector are up against conference itself) and other organisations similar risks and challenges. 2012 8,456.87 and events? Futurist Rohit Talwar, our keynote 2011 6,017.90 A: As a neutral not-for-profit association, speaker, in fact sees both identity and 2010 7,148.00 Intergraf is perfectly positioned to money as cornerstones of our life in the provide an unbiased, comprehensive 21st century. He will explore this in his 2009 10,941.41 overview of recent banknote and identity Copenhagen address and will explain 2008 6,445.20 developments. We do not work with how the digital domain is transforming our 2007 6,300.00 sponsors. We give all our exhibitors the notions of both. 2006 7,000.00 same opportunities to showcase their Q: Where do you see the security printing products. And when it comes to content, industry in 10 and 20 years’ time? 2005 3,630.00 the joint input of our Committee of A: Cash is virtually irreplaceable. It is a 2004 1,570.00 Experts gives our audience the means to public good, issued for the benefits of a learn more about today’s fast-changing 2003 3,092.00 country’s citizens. Unlike privately-owned global security printing market. As a 2002 4,780.00 digital payment networks, cash makes result, they can, for instance, see how payments possible independently of any 2001 Launch security features are migrating from one third party. field to another. Digital options will no doubt be more In addition, our day-to-day work with commonly used in the near future, the European Commission in Brussels, for both payment and identification. where we represent the interests of the However, they will not exist alone. Just commercial printing industry, keeps us at like gold is always a safe haven in times of the forefront of legislative development in economic crisis or uncertainty, banknotes the field of security printing products. and physical identity documents will remain essential pillars of a country’s economic wealth and security. VOLUME 17 – NO 8 | AUGUST 2019 11 Americas Readable Polymer Substrate (Continued) Spectra is already a known and proven It has now developed a secure polymer Cash Cycle – A supplier to the banknote industry, substrate aimed at solving this problem supplying its central bank level 3 taggants through cooperation with the afore- Revolution in for cotton substrate banknotes through a mentioned supplier of BOPP. Specifically major banknote printing company which Spectra wanted its partner to be USA Boston has 19 central banks as customers with based (it itself is based in Providence, From legislating financial inclusion to Spectra supplying one directly. Spectra Rhode Island) and technology driven engineering efficiency in the cash cycle, also supplies phosphors to several to ensure a close like-minded working and from cash handling at retail level to companies for use in security threads and relationship. This was necessary because, sustainability in the banknote industry, banknote inks. according to Dr Lawandy, ‘polymer the 2019 Americas Cash Cycle Seminar It has also tackled the problem of soiled cannot simply be impregnated’ and (ICCOS) will tackle a diverse group banknotes by developing the world’s much development work was involved of topics in Boston from November first banknote cleaning technology called in creating a polymer where the security 12–15, 2019. Aeris™. This technology can remove oils taggant is located in the actual primary The speaker lineup on the main stage and other contaminants from banknotes layer of polymer. includes experts from the Federal Reserve, in circulation, protecting processing The partnership and supply agreement G+D Currency Technology, PlanFocus, staff from hazardous contaminants and will give Spectra the capacity to supply Suretraxx Cash Management Systems, extending the life of banknotes, which, it more than 2 billion notes per year MIT’s Digital Currency Center, Armorsafe, claims, can save central banks up to $10 immediately, with volumes as high as 10 Glory, Cassida, CIMA, Lowers Risk Group, billion dollars annually. billion banknotes per year subsequently. and more. Spectra’s CEO, Dr Nabil Lawandy, says This is the first time Spectra will market its After a successful track and trace pilot that the driver behind this new secure products – the polymer and the sensors – this past year, the Federal Reserve Cash polymer development is the increasing directly in the banknote market. It will also Product Office, Davis Bancorp, and use of polymer globally. provide a service for the sensors. Suretraxx Cash Management Systems Until the current decade, polymer The level 3 polymer technology has been will demonstrate the program and share substrates were primarily adopted for fully production qualified and sensors efficiencies gained in a pre-seminar their increased wear resistance and have been developed which operate at workshop titled ‘Implementing Cash consequent longer life, and hence their speeds of 15m/second, 50% faster than Visibility: How Track & Trace Can Add use was mostly restricted to lower and the fastest transports currently available Efficiencies to the Cash Cycle’. mid denominations. However, once CCL and well in excess of 120,000 notes The ‘Digital Payments for Cash Secure invited the banknote industry’s per hour, which is standard for the large Professionals’ workshop offered by security feature suppliers to cooperate banknote sorting machines used by Currency Research (CR) will also take place with it to develop security features central banks. in advance of the main seminar. It will cover specifically for its polymer substrate The sensors are designed to last 20 developments in the digital payments sector (Guardian®), the emphasis changed to years, and under testing have been – and why these developments matter for security as well as durability. shown to have a false reject rate as low cash operations, whether in retail, banking, Canada was the first country to take as 1 in 100,000. The company has the or CIT operations. this dual approach with its new Frontiers capability to create a number of specific An addition to the program will be the series, issued from 2011. The success of covert signatures for different central inaugural ‘Latin America Day’ devoted the series led to the adoption of polymer bank customers – initially around six are to regional presentations, discussions, by the Bank of England and the entrance available, with another four ready by the networking, and solutions exploration for of a second polymer supplier – De end of 2020. the Latin American region. The program La Rue. Dr Lawandy commented that ‘we are will be conducted in Spanish and led by All of these developments have led to extremely pleased to have formed a Santander and Currency Research. other new series of notes produced on its long term partnership with a major Growing group for Sri Lanka increased adoption as a substrate. The multinational supplier of high performance BOPP to bring disruptive new capabilities Meanwhile, CR has stated the list of those one type of security feature that polymer to the industry and extend our revenue signed up for the Asia Cash Cycle Seminar, lacked however, was a central bank, generation potential by combining our which takes place 23-26 September in Sri machine readable, level 3 feature – which core competence in covert security with Lanka, is growing. Spectra recognised as both a weakness and an opportunity. polymer substrates. We have created a CR’s Vice President Operations, Dan secure supply chain which can provide Harrison, who recently returned from a substrate with or without opacity and second visit to Sri Lanka, states: ‘Colombo anti-static layers, and will be featuring this is vibrant, busy, safe and back to normal. technology at the upcoming Banknote The Central Bank of Sri Lanka and the local 2020 conference in Washington DC.’ cash community are eager to welcome their international colleagues. Sri Lanka has put in place security measures to safeguard its visitors, and the beautiful country will be sure to give you the warmest of welcomes.’ Visit asia.iccos.com and americas.iccos.com for more information.

12 CURRENCY NEWS | CONFERENCES Sound of Intaglio™ – 21st Century Blooming Intaglio Authentication Marvellous Intaglio print has been one of the Importantly, Sound of Intaglio does not foundations of banknote security for need any data for comparison but works They say that ‘money doesn’t grow over 160 years. While the unique feel autonomously. As a result, there is no need on trees’, and that there is no such of intaglio print and the intaglio-printed for external connections, to a database, thing as the ‘magic money’ tree. banknote facilitates public recognition, local or remote. Sound of Intaglio works on But this artwork proves otherwise! it could until now only be used for all existing intaglio structures without the machine detection by the addition of need to re-design the banknote or modify special additives, or taggants. Sound of Intaglio. In the mid-2000's KBA-NotaSys (KBA) At the Banknote 2018 conference in Dallas, and the Institute for Industrial Information coverno showed a concept for a forensic Technology (inIT) of the Ostwestfalen-Lippe analysis device (coverno was established (OWL) University of Applied Sciences began as a joint venture at the beginning of 2017 a research programme to determine how to to industrialise and commercialise the use the inherent characteristics of intaglio results of the Sound of Intaglio research print for machine authentication. program). This has been developed into the The 3D characteristics of intaglio have first commercially available device utilising proven difficult if not impossible to Sound of Intaglio. The Document Analysis measure for authentication purposes. and Classification System (DACS) is a Instead the research focussed on the stand-alone laboratory standard device for spatial frequency characteristics of the analysis, description and classification of intaglio print structures, reminiscent of banknote counterfeits. An advanced touch those on a vinyl record. On a record, the screen operated user interface controls the edges of the grooves encode the musical process, and report data can be output for signal. The research demonstrated early recording and evidentiary use. The system on that the structures created by intaglio enables the classification of counterfeits could be identified, classified, and used through a comparative process. This is for authentication. manual at present, but there is on-going development to automate this, and add This is why KBA called the resulting other enhanced capabilities. patented method the Sound of Intaglio™. ‘Specimen Florae Britanniae’ was There are no additives or taggants, no KBA’s research and development commissioned from the artist Justine special sensors, the method simply program has focussed on the fact that Smith by the Bank of England as part of analyses the 2D images of the intaglio print. Sound of Intaglio is scalable. While at the the exhibition it is holding at its museum DACS level it uses high-resolution image to celebrate its 325th anniversary. The Sound of Intaglio method uses state acquisition, the research has demonstrated Entitled ‘325 Objects, 325 Years’, the of the art wavelet transform. These highly an algorithm providing meaningful exhibit displays 325 objects from the efficient digital filters allow fast analysis of classification at considerably lower bank’s archives, ranging from Roman the images and reduction to the essence of resolution. Integration to a standard POS relics to a nuclear fall-out calculator from the sharpness, opacity and high contrast of device is on-going with a leading banknote the Cold War, all exploring how money intaglio structures. High-frequency details equipment manufacturer. and the way we pay for things has in the image are distributed over the entire KBA is working on further applications for transformed since the Bank of England intaglio-printed area of the banknote. was established in 1694. Wavelet coefficients resulting from the Sound of Intaglio. And it has stated that transform then allow the reliable and robust it welcomes any opportunity to work with The delicate botanical sculpture is made classification of intaglio where it is present, partners in the banknote industry to bring from steel, real twigs and genuine Bank as no other commercially available print this innovative new approach to banknote of England £50 series E notes that were method results in such high-frequency authentication that uses intaglio as a central marked for destruction because they details as those of intaglio print. security feature now and into the future. were an old design or uncirculated test notes. The notes were issued in 1994 and withdrawn from circulation in 2014. The artist used the notes to create a range of wild British plants. The bouquet is held in a silver water jug made by silversmith Anthony Nelme in 1694 ,which forms part of the Bank’s permanent collection. The exhibition runs until 29 May, 2020.

coverno’s first commercially available device utilising Sound of Intaglio™: the Document Analysis and Classification System (DACS).

VOLUME 17 – NO 8 | AUGUST 2019 13 IACA Finalists for 2019 IACA Coin Awards The finalists for the IACA Excellence Best New Commemorative in Currency Coin Awards have been or Test Circulating Coin announced. IACA members will now vote for the winners, who will be Issued at Face Value announced in Rome on 15 October at Reserve Bank of New Zealand the Coin Conference. Armistice Day coin: the Armistice Day Coin is the second in a two-coin series The finalists are as follow: produced by the Reserve Bank to mark Best New Circulating Coin Bangko Sentral ng Pilipinas: for the centenary of World War 1 (see image or Coin Series the Coin-Ed Program for the new left). The coin’s standout feature is the Philippine coins – which utilised multiple use of colour. After striking, a computer Bangko Sentral ng Pilipinas: for the communication channels to disseminate controlled high-speed colour pad printer New Generation Currency coin series – information aimed at increasing added the ink which was cured by comprising 10 piso, 5 piso, 1 piso, 25 awareness and promoting engagement passing the coins through a furnace. sentimo, 5 sentimo and 1 sentimo coins. in the recirculation and proper use of the South African Reserve Bank: for the coins. Nelson Mandela R5 commemorative United States Mint HIP Pocket Change coin, which was used as an opportunity Website: the website for kids offers a to invest in new development and variety of educational games that may manufacturing technology. This enabled be played by children or incorporated in SARB to explore new features such as lesson plans by educators. a latent image which is visible on the reverse of the coin, whereby '1918' Best New Coin Product, changes to '2018' when the coin is tilted. Feature or Distribution Innovation Royal Canadian Mint: Tri-Metal Security Test Token, which is made from three metallic pieces comprising one metal ring and two inserts, each of which is approximately half the thickness of the outer ring. This novel geometry results in a coin with two different metals on each

Central Bank of Mauritania/La Monnaie side and allows for an increased level of People’s Bank of China/China Banknote de Paris: for the large denomination 20 security at a cost-effective price. Printing and Minting Corporation: ouguiya coin, which is the world's only for China's High-speed Railway circulating tricolour coin. commemorative circulating coin. New United States Mint: for the ‘W' Quarter- features include multi-layer sand blasting Dollar Circulating Coin. As part of National and mirror field treatment; information Coin Week, the United States Mint security technology by recognizing the launched a limited amount quarter-dollars micro-text, latent image and laser dot with a ‘W’ mint mark (for the West Point matrix together; an opening window Mint) into circulation. to show the edge of the coin and a The Singapore Mint Coin Visual burnishing process optimized to solve the Inspection Machine: this is able most typical surface defects, such as fog- to differentiate coins of the same like defect on the core-ring jointing area. specifications, but of different designs/ This is the fourth series of the awards, the visual features/condition/surface finishing. previous three having been presented at The machine seeks to serve two key the Coin Conferences in 2013, 2015 and purposes: 1) to sieve through coins 2017 respectively. Sponsored by Currency which are acceptable for re-circulation News™ and run by IACA, they are designed Best New Circulating Coin and 2) to differentiate coins of the same to promote and recognise excellence in Related Public Education specifications, but of different designs. the industry.

Program, Website or App The Singapore Mint: for Coin The finalists for the 2019 awards were Reserve Bank of New Zealand: for the Recirculation via Integrated Coin selected by a panel of seven industry Armistice Day Coin Public Awareness Processing and Management, specifically experts including Alan Boaden (formerly of Campaign – the Armistice Day Coin the promotion of coin recirculation in Reserve Bank New Zealand), Jon Cameron launched with an innovative campaign Singapore via the introduction of coin (formerly of the US Mint), David Tidmarsh which invited people to ‘SPEND IT. KEEP deposit machines to the public and banks, (Currency News), along with Richard IT. REMEMBER.’ The campaign also had on a 24/7 self-service basis. Recycling Wall (formerly of Bank of Canada), Brian a strong educational component. of coins is the process where by coins Lang, Tom Ferguson and Eugenie Foster are returned to the banks, sorted and from IACA. repacked before being issued to the banks again for re-circulation.

14 CURRENCY NEWS | AWARDS 2nd New Series for the Gambia Gambia’s new banknotes, the second In place of the portrait, the main features new series in four years, has now gone on the new notes are native birds. Other into circulation – having first been design features are based on the country's presented by the Central Bank of the flora and fauna, along with historical sites. Gambia to the President, Adama Barrow. They are denominated in 5, 10, 20, 50, 100 The main feature of the new notes is the and 200 dalasi. absence of the portrait of former President The old 25 dalasi which was part of the Yahya Jammeh, which appeared on the last-but-one series, has not been replaced, new series issued in 2015. A year later he while the 200 dalasi, which made its debut was ousted, and went into exile in 2017. in 2015, has been retained (although has That series was withdrawn in early 2018 not yet been issued). and replaced with a reprint of the prior series pending the design and production of this new family of notes.

In other news… Ulster Bank, one of Northern Ireland’s four The Iranian government has approved The National Bank of Romania will issue (soon to be three) note issuing banks, has plans to revalue the rial by removing four a new 20 lei banknote in 2020, featuring unveiled the design of its new £20, which zeros and to revert to the currency’s old Ecaterina Teodoroiu, a fallen heroine of the will go into circulation next year. name, the toman. 1st World War. According to the Bank, the The note, which will be produced on The bill was presented by the Central Bank choice of portrait has double meaning. First, polymer, includes images of street of Iran to the government in January. Now it backs efforts for gender equality. And entertainment and skeletons inspired by that it has been approved, it will go before second, it marks the 100th anniversary of Halloween celebrations in Derry (the second the country’s parliament for voting and final the Great Union (of Romania, Transylvania, largest city in the province), bricks and tiles approval by the Guardian Council before it Bessarabia, and Bukovina) which followed used in many of Northern Ireland’s public goes into law. the war. building, an outline of Lough (Lake) Neath Although Iran has been weighing up plans The new banknote will bring the number of and a picture of its famous eels. to revalue the currency for several years, denominations of Romanian banknotes to these have recently gained traction after the ten, ranging from 1 to 500 lei. rial lost more than 60% of its value in 2018. According to local reports, the decision Bank Al-Maghrib will issue a new 20 was made to ‘maintain the efficiency of the dirham polymer banknote in September national currency and facilitate and restore to commemorate the 20th anniversary of the role of cash instruments in domestic King Mohammed VI’s accession to the monetary transactions’. throne. Designed and produced by Dar The return to the name toman – in use until As-Sikkah, it will be the first Moroccan the 1930s – does away with a dual system polymer banknote, and will be issued in which many visitors to Iran find confusing. limited quantities. The star of the hit television series Derry Girls, While the rial is the official name, many Jamie-Lee O’Donnell, helping to launch the design Iranians still make their calculations in of the new note in Derry with (left) Terry Robb, Ulster toman. The new toman will be divided into Bank’s Head of Personal Banking and (right) Chris 100 rials – a tenfold redenomination of the McGuinness, local Director. current toman which is divided into 10 rials. Iran’s banknotes are currently denominated from 1,000 to 100,000 rials. Iran ‘cheques’ The East Caribbean Central Bank has are also issued in denominations of now issued the $100 and $20 polymer 500,000 and 1,000,000 rials, which banknotes in its new series. The $50 was circulate freely and are treated as cash. issued in June. The $10 is expected to be There are currently around 7 billion notes in released in September/October and the circulation, with an annual replacement of final note in the series, the $5, next August 700 million per year. or September. The front has the portrait of the King, while on the reverse are representations of some The Reserve Bank of Australia has of the most significant projects completed announced the new A$20 banknote will during his reign, including the Mohammed be released into general circulation on 9 VI Bridge, the Mohammed VI satellite, and October. More than 170 million A$20 notes the Al Boraq high speed rail line. are currently in circulation, around 10% of the total. The new note will be the fourth in the Next Generation series, with the final note, the new A$100, due to be issued next year.

NOTE AND COIN NEWS | VOLUME 17 – NO 8 | AUGUST 2019 15 IN Groupe in Negotiations to Buy SURYS IN Groupe (formerly known as It specialises in security solutions based Earlier this year, it signed an agreement with Imprimerie Nationale), a French state- on optical and digital sciences, and is the Nepalese government to build a new owned specialist in secure documents the developer of such features as the security printing facility outside Kathmandu, and identity, has announced that it has Alphagram™ (a demetallised diffractive although this has now been put on hold entered into exclusive negotiations with device used on the first euro series),DID ™ following the submission of a competing bid the shareholders of the hologram and (a unique colour permutation technology from Germany. anti-counterfeiting solutions specialist used on banknotes for the Philippines and Subject to usual regulatory conditions, ™ SURYS for its acquisition. Poland), and the Plasmogram , an optically including consultation with the works SURYS, formerly known as Hologram variable feature based on surface plasmons councils of both groups, the transaction is Industries (HI), was founded by for use in windows. expected to close by the end of 2019. entrepreneur Hugues Souparis (its IN GROUPE is owned by the French According to IN Groupe, it wants to President) in 1985 as a private company. government through the State Investment acquire SURYS’ technology for the secure It had sales in 2018 of €92.8 million and Agency (APE) and had sales in 2018 of components for its activities in securities, over 400 employees and facilities in France, €314.2 million. The company has 1,000 identity and banking, for its biometric Germany, the Netherlands and the US, with employees, four sites in France and eight solutions, and to complete its digital identity sales offices in Poland and Dubai. business premises throughout the world, and traceability offers, with the objective with sales in 77 countries. Its principal focus of ‘consolidating the maintenance of a is on identity solutions. French sector for the benefit of French identity documents.

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