CN Banknote 2024 - Day 1

Technology Comes to Texas

„ By Sergio Sánchez, Currency Research

A very warm welcome to you all to the Banknote Conference 2024, the industry’s premier technology-focused event with a long and rich history of hosting the world’s experts from central banks, printing works and industry suppliers and providing unparallelled opportunity to discuss emerging trends, technologies and innovations.

This year, we are delighted to host nearly 425 delegates from 72 countries and 183 organisations. Of those, 92 are central banks and/or printworks – demonstrating, yet again, that this event attracts a higher level of attendance from those responsible for specifying, producing and issuing currency than any others.

The last time we came together for the Banknote Conference was back in February 2022, when combined with the Currency Conference to hold the first event following COVID.

I wasn’t with Currency Research (CR) at the time – but by all accounts, it was both challenging and energising – with people delighted to be able to see each face to face for the first time in nearly two long years. Those days of lockdowns and restrictions are, fortunately, becoming a distant memory, and long may they stay that way. In the meantime, we have been able to

plan for the 2024 event with confidence, creating an exciting and varied programme set against the backdrop of Fort Worth – renowned for its Texan hospitality and home to the BEP’s newly expanded Western currency Facility (WCF).

We have made a great start – yesterday hosting workshops on circulating coins and security design, with a special forum for state printworks. We also helped the International Association of Currency Affairs celebrate its 20th anniversary in style. Added to this was a tour to the WCF, the expansion of which, after more than five years, is now complete. It now stands at 93,000 m², adding much needed space for new process capabilities and environmental improvements, additional vault storage, and administrative space to support future generations of currency design and production, and this is the first opportunity for the industry to see it for themselves.

Topping off the day was an evening of traditional Texan entertainment, sponsored by Authentix, at the Fort Worth Stockyards, every inch of which tells the true history of Texas’s famous livestock industry.

Today, we lead off with a keynote address delivered by Chief Lynn Malerba, the Treasurer of the United States. Her insights will set the tone for the conference, offering us all invaluable perspectives on the future of currency and payments.

You can expect over the next two and half days a diverse range of plenary, innovation and panel sessions covering topics such as cash trends, counterfeit threats, currency production developments, sustainability, and more. We will also be hosting the presentation of the IACA Excellence in Currency Awards at the conference dinner on Wednesday evening, and the conference will conclude on Thursday afternoon with a visit to the Federal Reserve Bank of Dallas’ Economy in Action Exhibit and cash-processing operation. The program has been carefully curated by our Banknote Advisory Committee, comprised of CR leadership alongside industry leaders from both the government and private sectors to help ensure we deliver excellence for all participants and create a focus and program that is interesting, engaging and, above all, relevant to the needs of today’s industry. Their support has been invaluable and I would like to extend my heartfelt thanks to them, as well as to our sponsors, our 50+ speakers and, of course, to all our delegates.

I joined Currency Research last year and this is my first rodeo as Chair of the Banknote Conference. I very much look forward to meeting up with you all over the next few days, to learning about the advances in our industry, and to enjoying the ambience where technology and innovation intersect with friendship and community.

On behalf of all of us at Currency Research, we hope you have a great conference and that you learn, share, engage and, above all, enjoy yourselves.

BANKNOTE CONFERENCE 2024 | DAY 1 / 14 MAY 2024

The Challenges of Circulating Coins

The Coin Workshop started this year’s Banknote Conference with a mix of data, story telling and discussion.

Notes v Coins – Changes 2019-2024

Coins:

§ New series – 12

§ New designs – 8

§ Upgrades – n/a

§ New denomination(s) - 10

§ Coins discontinued – 5

§ Changes to composition – 2

§ Percentage – 20%

§ No of denominations changed - 115

Out of 180 currencies and 1,000 denominations, number of changes : Notes v Coins – Changes 2019-2024.

Astrid Mitchell introduced the workshop with the comment that, on the surface, it appeared somewhat counterintuitive to be talking about coins at an event entitled the Banknote Conference. Nevertheless, the cash cycle comprises both banknotes and coins, and cannot function effectively or efficiently without the latter. They are therefore relevant to all cash cycle stakeholders, regardless of whether they make or issue them or not.

She then provided a comparison of banknote and coin design changes 20192024, showing a high level of coin activity but an even higher level of banknote activity, by a factor of nearly four. For coins, 12 countries introduced new series in the period, eight redesigned one or more coins, 10 issued new high denominations, and five discontinued the issue of the lowest value coins. Overall, 115 coin denominations changed in some way. This bodes well for October’s Coin conference in Lisbon where there will be time to explore these changes in more details.

Astrid touched on some of the current challenges facing coins, including industry over capacity, the cost of handling / transporting coins, coins that are hoarded and not circulated and sustainability. These were discussed again later in the workshop.

Cash in circulation

deep dive

Based on a database of cash in circulation data by denomination for

Banknotes :

§ New series - 49

§ New designs- 8

§ Upgrades - 42

§ New denomination(s) - 12

§ Notes discontinued – ??

§ Changes to substrate – 15

§ Percentage – 70%

§ No of denominations changed – 354

7

coins and banknotes around the world, 11 countries from Asia, Europe, Latin America and Africa were reviewed and commented on. The review compared the year-on-year percentage change in the volumes in circulation, and also included a commentary based on a per denomination analysis. While every country is unique, a number of trends were evident. In the Czech Republic and Denmark, for example, demand for the high value banknotes has clearly stalled. In Sweden, Indonesia, Sri Lanka, Mexico and Namibia there was evidence of problems at the coin note boundary. For example, in Mexico the demand for the 20 peso coin was up 65% in 2023 but the banknote of the same denomination was only up 2%.

In Fiji and Mexico, the lowest value coin denomination had high levels of increase in volume in circulation. In Fiji, a coin worth two US cents grew by 6%, suggesting an opportunity to rationalise the denominational structure and to save money since this coin is likely to be issued with negative seigniorage.

Problems of excess coins

The second half of the presentation looked at a UK case study where 200 million low value bronze coins, the 2 pence coin, are being stored in cash centres at a cost of £90,000 over a 13 month period. 1,600 cages, and their liners, are being used, creating a shortage of both which then leads to inefficiencies in other coin deliveries.

An industry wide paper is being prepared by the UK’s Cash Industry Environment Charter (CIEC) group to seek change from the UK Treasury to allow these coins to be removed from the cash cycle. This is being argued primarily on environmental grounds and will be discussed as part of the Cash Sustainability Forum™ in June in Frankfurt.

Positive Canadians

Jeff Hanke from the Royal Canadian Mint (RCM) provided data on the public’s demand for cash and coins in Canada. 37% of Canadians still pay with coins for transactions with a value of C$5 or less. Respondents to a survey said they held, on average, C$191 in cash at home, of which $27 was in coins. 94% of respondents had coin at home. 74% of Canadians have absolutely no plans to go cashless.

Jeff went on to give examples of how the RCM has used coins at home and abroad to tell ‘stories’ that resonate with society. A number of videos were shown and information on the public education approaches taken shared. The ability to tell stories, make coins interesting and excite awareness and engagement was clearly demonstrated.

Shared challenges

Finally, Simon Lake, recently of the Royal Mint and now an independent consultant, worked with the room to identify common issues in the room. He then focused on two, that coins are not returned and forecasting.

Examples of initiatives to increase coin returns were shared from Hong Kong’s coin cart programme, which saw 30 million coins returned in the first three months, the Philippines coin education programme in schools, Singapore’s coin return programme that saw a 100% increase in coin returns saving $16.5 million, Sri Lanka’s outreach work, and Mexico’s coin promotion video.

Forecasting is based on a mixture of extrapolations from historical data and judgements. The suggestion was that making the commercial banks responsible for forecasting led to the best results. In the UK, commercial banks provide forecasts of their coin demand and have to guarantee to take 80% of their forecast. Weekly meetings are held to allow surplus/deficit coin holdings to be exchanged.

This was a very quick look at some of the challenges facing circulating coins, and an hour and half was nowhere near long enough to even scratch the surface. But it nevertheless provided a good foretaste of what is to come at the Coin Conference™, which takes place 28-30 October in Lisbon, Portugal (with participants in the workshop benefiting from a 10% discount to attend).

IACA Awards – Celebrating the Finalists

This afternoon, at 17.10 – following the panel discussion led by IACA on Cash Visibility and Collaboration – there will be a presentation of the 11 finalists of the IACA 2024 Excellence in Currency Technical Awards. The winners from among these finalists will be announced at the conference dinner on Wednesday evening.

The finalists are:

Best New Banknote Feature, Product or Process:

„ CCL Secure – Effect™ Cameo feature

„ De La Rue – ASSURE™ covert feature in the core of a polymer banknote substrate

„ Jura and OEBS – stainless steel intaglio plate making process

„ Louisenthal – Green LongLife™ banknote substrate

„ Meta Materials – Inspired by Nature – QUANTUM™ stripe.

Best Limited Circulation/ Commemorative Banknote:

„ Bank of Guyana – $2,000

„ Eastern Caribbean Central Bank – ECCB $2

„ National Bank of Kazakhstan –10,000 tenge.

Best New Cash Cycle Innovation Finalist:

„ Bangko Sentral ng Pilipinas – The Coin Deposit Machine

„ The ECB in cooperation with the euro area NCBs – Product Environmental Footprint (PEF) study

„ Giesecke+Devrient Currency Technology – Banknote Fibre Extraction.

For the first time, there will also be an award for the Best House Note, with finalists including:

„ Banco de Mexico –commemorative house note for the 5th anniversary of the printworks in Jalisco

„ Bundesdruckerei – Ignis, the first note of the Nihilo Series

„ Casa de Moneda de Chile – 279th anniversary house note

„ Komori – the Phoenix anniversary note

„ Kurz – Kinegram® Around the World

„ Landqart – 150th anniversary house note

„ Louisenthal – Jump™ – Camera house note.

The finalists for the first three categories were put to a vote of IACA members. For the Best House Note category, IACA’s central bank members are voting for the winner, along with conference delegates. The winner will also be announced during the conference dinner.

The Directory of Currency & Technology Suppliers

The wait is over and the latest edition of The Directory of Currency & Technology Suppliers is now here.

This sought-after directory is an essential resource for central banks and issuers, printers and mints, and everyone in the cash cycle to identify suppliers and partners. The latest edition is the seventh since its introduction in 2004.

The directory, which was last published in 2018, features seven dedicated sections covering all aspects of systems, solutions and services for the cash cycle, from specification to end of life, and all stages in between. Over 500 companies are listed.

The Directory is available free of charge for a limited period to Banknote Conference delegates. Click on the image to download your copy.

Cash Visibility and the Future of Cash

The International Association of Currency Affairs (IACA) is 20 years old this year. It held a session on ‘Cash Visibility and Collaboration’ which was a full house with nearly 120 people attending. Even with 77 member organisations drawn from central banks and suppliers, this turnout was exceptional.

IACA has been focusing on this topic this year and has run both a webinar and an online discussion forum about it. Richard Wall, Chairman of IACA, introduced the topic and each table was given four questions to debate. These looked at where greater cash visibility could create the most benefit, what is blocking creating visibility in those areas and, assuming answers can be found, who needs to collaborate, lead and pay for these initiatives.

Forty minutes of lively conversation led into four of the 10 tables giving their feedback.

One table concluded that data was critical to ensuring cash visibility. To get this, stakeholders across the cash cycle will need to collaborate and that central banks are the right organisation to do this. At the moment the business case for achieving end-to-end data visibility is not there, but if cash is to survive, this data must be collected.

Another group focused on data about retail payment transactions. Again, they saw central banks as being the co-ordinator, but commercial banks should pay.

The third group also found that data from each touch point in the cash cycle was needed. Each should pay since all would benefit. The biggest obstacle was a lack of trust.

The final group was concerned that tracking banknotes might be seen as compromising the privacy of cash. Again, it was the role of central banks to coordinate across the cash cycle. As with the GS1 initiative, since all benefit, all should pay. This is a shared responsibility.

Following on from this meeting, IACA will be hosting a panel discussion this afternoon on the topic, moderated by Richard Wall, with panellists including Ben Thorpe of Glory, Steve Son of the Federal Reserve’s FedCash, and Pearl Kgalegi of the South African Reserve Bank. IACA’s work on this topic will continue and at the end of the year a full report will be created summarising what has been learnt.

Currency Publications Ltd (a Reconnaissance/Currency Research company).

Editor: Astrid Mitchell.

No part of this publication may be reproduced, stored in a retrieval system or translated in any form or by any means – electronic, mechanical, photocopying, recording or otherwise – without the prior permission of the publishers. While every effort has been made to check the information given in this publication, the publishers cannot accept any responsibility for any loss or damage arising out of, or caused by the use of, such information. Opinions expressed in Currency News are those of the individual authors and not necessarily those of the publisher.

Crane NXT Restructures Currency Business

Further to the completion of the acquisition of OpSec Security for $270 million, Crane NXT has announced a restructuring of its business segments.

Subsidiaries Crane Currency (a Banknote Conference sponsor) and Crane Authentication form part of the new Security and Authentication technologies segment, along with the acquired OpSec business. The position of Crane Payment Innovations (CPI) remains unchanged and it will not form part of the new segment.

According to Crane NXT, this structure better aligns with the company’s strategy to expand its portfolio of technology solutions and serve its customers. The updated segment presentation will be effective in the second quarter of 2024 and will not affect the first quarter’s financial results.

Aaron W Saak, President and CEO of Crane NXT, stated that in the first quarter, ‘we made meaningful progress in advancing

„ Primary Sponsors

our strategy and executing our plan to grow sales to $3 billion by 2028. With the acquisition of OpSec Security, we believe we have an industry-leading portfolio of digital and physical authentication and brand protection solutions, strengthening our position as a market leader and providing trusted technology solutions to secure, detect, and authenticate our customers’ most valuable assets’.

As part of the restructuring, Sam Keayes, previously the President of Crane Currency, has been elevated to Senior Vice President. In this role, he will oversee the Security and Authentication Technologies segment and report directly to Mr Saak. Dr Selva Selvaratnam will continue leading OpSec and report directly to Mr Keayes.

„ Supporting Sponsors

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