In 2021, The Bank of England will complete its polymer series of banknotes with the issuance of the Turin 50GBP note. Scotland will probably beat the Bank of England to the punch and release its 50 before it, but once the Turn notes comes out, the entire current series of banknotes throughout the UK will be in polymer. The real question is why? Why did the Bank of England make the change from paper to polymer?
Bank of England
The Bank of England was formed in 1694. It was formed when King Charles II defaulted on his debts to the goldsmiths- who were the lenders of the time. A number of the goldsmiths and wealthy Englanders pooled their resources and risk and formed the bank to be able to lend money but in a less risky manner. Paper banknotes- more like stock shares were issued then. And the Bank of England along with provincial banks issued paper banknotes ever since.
Over the 400+ years there have been counterfeiting scares and concerns about fiat currencies represented by paper versus precious metals, the bank has stuck with paper. Even during WWII when Germany actively and aggressively counterfeited English ‘White Notes’, England did not abandon paper. So why in the early 2000’s did the Bank of England, with its 200 year history using UK-printed banknotes on UK-produced banknote paper.
First Polymer Banknotes
Polymer banknotes have been around since the 1970s. Mobil tried with its polyolefin film. Dupont tried with its Tyvek film. But it wasn’t until the late 1980’s that the Reserve Bank of Australia and Securency launched and stuck with polymer banknotes. For years, polymer was used only in hot and humid countries and countries close to Australia. Polymer was also tried in many commemoratives. Then Nigeria turned to polymer. This was a major development because Nigeria is a very large banknote market. But for 20 years, polymer was only 4 – 8% of the total global banknote usage. And no ‘technical banknote buyer’ had chosen polymer. Then Mexico chose polymer for the 50 peso and the supplier of polymer substrate built a plant in Mexico.
Mexico is considered a leading banknote specifier. Not only do they have a large demand, but the Bank of Mexico technical team is highly respected. Mexico, Canada, and the UK have had a long history of technical sharing and one can assume their experience with polymer was shared with Canada and the UK. In 2011, the next polymer domino fell. Canada converted their banknotes to polymer. But there was still only one source of polymer substrate.
In 2012, De la Rue- the supplier of paper and manager of the BOE print site introduced Safeguard, a direct competitor to polymer from Australia and Mexico. A year later, Innovia (a UK company) bought Securency and began discussions about building capacity in the UK. In a space of a little more than 3 years, a second leading bank had commercialized polymer. The Banks supplier of substrate started producing polymer and the largest supplier was not controlled by a UK company.
Future of UK Banknotes
There was no massive increase in counterfeiting rates in the UK around this time. However the bank now had 2 reputable suppliers with strong links to the UK. The Bank conducted a year long public survey of mocked-up polymer notes and the public loved them. In 2015, when the new polymer Churchill fiver was issued, De la Rue was still managing the printing and supplying paper. It also was negotiating a new contract to continue to manage banknote printing. Switching to polymer not only gave the bank a stronger negotiating position with DLR. It also allowed the Bank to take more control of its security features and be less dependent on DLR.
The 6 years of polymer pounds has not been without issues. Shrinkage has been an issue as had the loss of reflectivity on holographic overt features. However the bank has now issued contracts to both DLR and CCL (which bought the polymer banknote business from Innovia) to split the usage. The bank must be happy with their decision.
It is not publicly known if the Bank of England is committed to polymer for the next series. But in maybe 5 years a new series will be issued and their decision will be revealed.