Spectra Launches Machine Readable Polymer Substrate
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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’s M feature (and unique taggant is also strictly controlled
operations efficiencies.
other such features supplied by De La Rue once produced.
and Authentix) in cotton based substrates. For the half year, the company reported
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
Inside this Issue At the other end of the spectrum, what is
happening to banknote procurement?
& Minting, with its vast capacity and a
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,
change with greater use of outsourcing PWPW and Note Printing Australia.
1 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,
It has also been long predicted that the locus while – along with their printworks – the
3 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.
But the hand of the state in production
5 Cash as a Public Good – the Whilst some of this has come to pass, some
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
is not the point of this article. What is
8 20 Years of Making the of the 1990s for the initial production run
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
banknote production. In Asia, the Bangko
21st Century Intaglio already exceeds the demand for banknotes,
Sentral ng Pilipinas is reported to be looking
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
German printer Bundesdruckerei has a commercial supplier, what might have
14 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
way to buy banknotes? What is the role of
capacity and taken in other central banks
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
Currency division (formerly Circulating TRM has said that it has launched a three-
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.
a further 1 billion to 7 billion notes. The ‘The partnership allows us to reach new
Zagreb hopes to join the ERM II mechanism
new line will include equipment for paper markets, and will enable Loomis’ customers
in mid-2020 and could adopt the euro three
cutting, intaglio, numbering and other to benefit from unified and improved
years later at the earliest, replacing the kuna
printing processes. management of payments, regardless if its
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
and other security documents, as well
Luminescence Sun sent to the eurozone countries and EU
as coins. During the period following the Chemical Meets Anti institutions, signed by the Finance Minister
demonetisation of 2016, CNP Nashik Corruption Standard and Governor of the Croatian National
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
Centre for NCR
Security is understood to be the second
Clydesdale Bank, one of the three note NCR Corporation has opened a new Center
company in the industry to have received
issuing banks in Scotland, will be rebranded of Excellence (CoE) for services in Kuala
the certification.
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 According to NCR, the new centre
Marketing Director. ‘The ISO certification
on as a way of capitalising on the national will enable it to quickly introduce next-
process by BSI is very strict and enabled
image of the latter, as it was thought generation services that keep commerce
us to have a thorough internal check to re-
that the localised names of Clydesdale running for both large, global brands and
confirm we are on the right track. We highly
and Yorkshire were a barrier to growing local neighbourhood businesses. The
recommend other organisations in the
as a national brand hoping to challenge CoE houses 400 multi-lingual service
security printing industry to do the same’.
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
banknotes is brand recognition (effectively
for France and includes a disaster recovery centre
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
Bill Bancroft, Senior Vice President, Global
for Cashless Brittany, in western France, in July.
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’. Q: What is the main focus of the institute?
financial crisis, the rise of smart phones,
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 Q: IMTFI was initially funded by the Gates
Anthropology at Ripon College, is also an
and the same organizations. We wanted Foundation, major supporters of the Better
affiliated scholar at the Institute for Money,
to get research funding into the hands of than Cash Alliance. The IMTFI is neutral
Technology & Financial Inclusion (IMTFI),
people actually from the countries where when it comes to payments; however, there
University of California at Irvine, which has
things like mobile money deployments is an increasing focus on cash. What caused
made itself a name as one of the leading
were taking place. The idea was to create a this development?
institutes when it comes to the role of money
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 on, almost everywhere around the world.
The Director of the IMTFI is Professor Bill
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)
Public Good
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
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 developments in the cryptocurrency space.
UD: That physical cash will continue to
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
banks, politicians and governments when
As Bill has already pointed out, people use
different technologies for different purposes, – Call for
Papers
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.
there is no one size fits all payment solution. This dimension of payment method usage
A ‘Call for Papers’ has gone out for
People will always use different technologies is rarely captured in current cash payment
the next Mint Directors Conference
for different purposes – Venmo with friends studies and is difficult to learn through survey
(MDC). which takes place 26-29 April
and for the rent, debit cards for groceries, methods alone. Incorporating qualitative data
2020 in Cape Town, hosted by South
credit cards for more expensive purchases collection tools can help here.
African Mint.
like appliances, PayPal online, etc. etc. Understanding payment diversity at the
The programme will have a specific
First, there is a virtue in recognizing how micro-level is also relevant for policy making
theme on each of the three days –
people use payment diversity to achieve their at the level of monetary and fiscal policy. For
starting with Global Challenges, moving
different goals. example, there is growing evidence from a
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 The structure of the programme will be
some of which is the result of fees and costs
that sometimes this fact erects high barriers modular, with plenary sessions on each
associated with digital payments.
for the poor and underbanked. In many day covering the big issues, streamed
circumstances cash remains the best option. This is not only important for the poor
sessions focusing on the collector,
It’s the cheapest for the user, it’s portable, and underbanked but also, for example,
circulation and bullion markets, and then
it’s private… Not everyone on the planet is a for college and university students
interactive break-out workshops diving
well-off professional working in a clean office burdened with mounting student-loan
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, presentations in the following areas:
infrastructure in particular, will be crucial in
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 Circulating coins – the note/coin
always ask themselves: what if things go
authorities and state institutions that is boundary, seigniorage, optimising the
wrong? From a data breach, to massive
important for public accountability. In my denomination mix
disruptions in politics and society, to
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
UD: In addition to the policy considerations next generation of coin enthusiast
knowledge sharing accessible to all, just like
outlined in the paper, I would argue Case studies of successful coin
a physical book can be shared, borrowed,
for a more nuanced discussion of campaigns
and passed hand-to-hand to others whereas
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
Institutional actors should therefore be and their impact on our industry, but
supports an argument for a cashless future.
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. one central bank-owned mill (CBPM) in
Changing manufacturing landscape
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
Eurosystem and it establishes the annual suppliers were Louisenthal, Arjowiggins
In addition, there were three private
production requirement. The responsibility Security, VHP, Fabriano, Landqart, De La
sector printers within the Eurosystem
for supplying the ECB with those banknotes Rue and Crane Currency. There have been
countries accredited to supply the euro
lies with the National Central Banks (NCBs) far-reaching changes since then among
(Giesecke+Devrient, Enschede and
of the Eurosystem. The ECB is able to these suppliers – Arjowiggins Security has
Bundesdruckerei), and one outside (De
function because NCBs have lodged gone into liquidation, while the others – with
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
Luxembourg (1999)
decision in order to ensure that the launch
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
Eurosystem Tender Procedure (SETP)
under the EPPS?
Euro
Procurement:
Prior to the establishment of the EPPS,
with the intention that all would transition there were already two tendering groups of
to it by 2012. Under the new system, the
the Legal
NCBs who did not have their own CBPWs.
production allocated to those NCBs without In 2008 the Dutch National Bank took
in-house printing works, or which did not
Structure
the lead on behalf of a number of other
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
CBPWs), or which used SPWs, could the Bundesbank started tendering for
In 2004 the ECB issued guidelines
choose not to participate in the SETP, in its banknotes. This continues and new
to establish a process and timeline
which case their printing works continued to members of the Eurosystem have had the
to regularise Euro procurement.
produce the share allocated to these NCBs, choice of whether to run their own tenders
ECB/2004/18 said that from 1
but could not produce for other Eurosystem or to join one of these groups.
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 be set by it owing to a change in the
than the Bundesbank went to tender.
The NCBs with CBPWs, meanwhile, have assumptions on which the expected
Since 2004 there have been a series of single Eurosystem tender procedure
new guidelines which initially delayed the split into two groups.
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
procurement system was adopted, it In 2014 the ECB issued its
Principles stipulates that, if an in-house ECB/2014/18, guideline for the
must maintain: 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 Group NCBs. In the General Principles
Foster competition;
activities should be on the open market. laid out in Article 3, it stated, ‘NCBs
Reduce costs; 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 9Intergraf 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
Q: Can you tell us briefly about your 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
Q: Please give us an overview of Intergraf – marketing talks or sales pitches.
creating the programme for the event?
its activities and membership. Beyond content, Intergraf’s neutrality as
A: We work with a Committee of Experts
A: Intergraf is the European association an organisation is reflected in the overall
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 RECORDYou can also read
