Historical fun facts
1519: The German word thaler is first attached to a silver coin minted in Bohemia. The English word “dollar” derives from it.
1813: Paper money, denominated in dollars between $1 and $400, is first used in Canada, issued by the British army during the War of 1812.
1817: The first formal banknotes are issued by Montreal Bank (now the Bank of Montreal).
1935: The Bank of Canada is formed, and issues notes in 10 denominations ($1, $2, $5, $10, $20, $25, $50, $100, $500 and $1,000). Originally privately owned, the BoC is nationalized in 1938. But various chartered banks continue to issue money in their own currencies until 1944.
The origins of plastic money
Versions of synthetic banknotes were tested and used in Costa Rica and Haiti in the early 1980s, and later in Honduras, Ecuador and El Salvador. But the tropical climates interfered with how ink bonded to the polymer, leading to smearing. A few British printers also experimented briefly with polymer at about the same time. The man credited with inventing the first fully commercial plastic banknote is David Solomon, professor of chemical and biomolecular engineering at the University of Melbourne. Commissioned by Australia’s Reserve Bank after a wave of forgeries in the early 1960s, Dr. Solomon spent 21 years developing the polymer-based product. For his work, he later won the prestigious $50,000 Victoria Prize. Australia’s first polymer banknotes were issued, made from a transparent, thermoplastic polymer that is non-fibrous and non-porous.
Why we should love polymer
Plastic money is more durable than paper, lasting anywhere from 2 1/2 to four times longer than the cotton bills now in use. It is also much harder to copy, is cleaner (much less absorbent), and does not fray or curl at the corners. As a result, it causes about 40 per cent fewer jams in automated teller machines and bill-counting devices. There’s a significant environmental upside as well, since the Bank of Canada will have to turn on the printing presses at least 2 1/2 times less often, with proportional savings in energy consumption. Moreover, at the end of their lifespan, polymer notes can be recycled into other products.
Whatever its other benefits, security issues are driving technology change. According to Charles Spencer, the Bank of Canada’s director of business knowledge and international relations, what’s different about the new Canadian bills is the package of security features (in inks, foils and polymer substrate), which constitute a major advance.
Some security features thought to be included in the new polymer notes:
1. An optically variable device (OVD) embedded in a transparent portion of the substrate; when tilted, multiple images and optical effects are observed.
2. Transparent windows within the substrate that can virtually eliminate amateur counterfeiters trying to scan or photocopy banknotes.
3. A diffractive optical element – a holographic structure applied to the surface of the clear window.
4. A dynamic optical feature that changes colour when tilted under a light source.
5. A substrate composed of as many as five colours.
6. A colour-changing ink so that the note appears to change colours when viewed at different angles.
The physical size of Bank of Canada notes will not change. Each note will measure 69.85 millimetres in height and 152.4 mm in width. However, the new polymer notes are 10 per cent thinner and 10 per cent less heavy.
Notes are issued by the Bank of Canada, but the actual production of the banknotes is outsourced to the Canadian Bank Note Company and BA International Inc., a division of Germany’s Giesecke & Devrient. Both are based in Ottawa. The polymer substrate and other elements of the note are provided by outside suppliers, including Securency International.
Other polymer currencies
Canada is a latecomer to the polymer approach. Some 30 countries now use variations on the synthetic theme, including Australia, New Zealand, Indonesia, Malaysia, Brunei, Singapore, Chile, Sri Lanka, Thailand, Kuwait, Mexico and Romania.