bank of england floats £1 billion tender the new europa â‚¬5 makes its debut

CONTENTS

www.currency-news.comISSN 0895-9080

Reproducing Currency News is an illegal infringement of Currency Publications Ltd's copyright. © Currency Publications Ltd 2013

January 2013 | Vol 11 | No 1

Bank of England Floats£1 Billion Tender

The New Europa €5Makes its Debut

Continued on page 6

Continued on page 6

the confidential newsletter for currency

Mario Draghi, President of the EuropeanCentral Bank, unveiled the new Europaseries €5 banknote at the opening of the‘New Face of the Euro’ exhibition at theArchaeological Museum in Frankfurt onJanuary 11. This architecturally-endowedmuseum, which displays items from classi-cal antiquity among other treasures, was afitting place for the launch, given the serieshas been named after, and features a por-trait of, the Greek goddess Europa, whogave her name to the continent. The actualancient vase from the Louvre Museum inParis, from which the illustration of Europaused for the banknote was taken, forms partof the exhibition.

In his speech, the ECB presidentreferred proudly to the moment on January1, 2002 when for 300 million citizens in(then) twelve euro area countries, the eurofinally became real, this being ‘one of the

milestones laid down by the foundingfathers of the Economic and MonetaryUnion in the Treaty of Maastricht morethan 20 years ago’. ‘Euro banknotes’, heclaimed, ‘have become the most visible

The Bank of England, through theEuropean Journal of Public Procurement, isasking up to five operators to bid for theproduction of its banknotes. The contractcould be worth up £1 billion and could lastfor up to 14 years, involving the supply ofaround 1 billion notes per year.

The current printer is De La Rue. Ittook over the Bank’s printing operations inMarch 2003 for a cash consideration,including acquisition expenses, of £10m. Italso signed a supply contract for sevenyears (which was extended, in 2009, for afurther five years). The Bank, howeverretained the overall ownership of theDebden site, with DLR leasing the prem-ises at which the banknote printing takes

place. The new contract must be fulfilled in

Debden and, if DLR fails to win, then thenew supplier will take on the 200 staff atthe plant. It will also be responsible for themaintenance of the printing machinery,with the payment of any capital costs forrefurbishment or replacement coming, inpart, from the Bank.

The chosen supplier will be required toaccommodate changes in the features orsubstrates in line with security reviews bythe Bank. In particular, the chosen suppli-er must be prepared to print on paper orpolymer should the Bank specify eithersubstrate at any time during the life of the

The front and reverse of the new Europa €5

The New Europa €5 Makes its Debut 1

Bank of England Floats £1 Billion Tender 1

Comment: the Next Ten Years 2

‘Call to Arms’ Over Banque de France Plans to Spin-off Paper Mill 3

Modernisation at Casa de Moneda de Chile on Course 3

Brinks Partners with Wincor Nixdorf asCashEDI Becomes Compulsory 4

People in the News 4

Special Report: US Study on Alternative Coin Metals Needs More Work 5

“Mobile” Breaks New Ground in OpticallyVariable Threads 7

MAGnite – a New Mobile; MagneticResponse Feature 8

StarPerf – First Feature for SmartphoneVerification 9

New Generation of Cloud-Based, Cardless ATMS from Diebold 9

Ultra Durability from Oberthur Fiduciare 10

Arjowiggnis Launches DiamoneXtra 10

New Dates for the Coin Conference 11

Banknote 2012 Breaks All Records –Again 11

Headlines of 2012 – That Was the Year That Was 12

Note and Coin News 13

Banknote of the Month: Zambia DropsZeroes, Brings Back Coins 14

New Glossary for the Mint Industry 15

Conference Diary 15

New Building, New Cash ManagementSystem in Azerbaijan 16

CommentJanuary 2013 | Vol 11 | No 1 Currency News |


The Next Ten YearsThis month is Currency News’ 10th anniversary. We comment-ed on the major developments of the last decade in theDecember issue and now, to mark ten years of publication, weare making our predictions on what the next decade may bring.

Early announcements: There is an increasing trend forcentral banks to announce plans for a new series prior to wide-spread circulation – partly a consequence of more opennessgenerally, and partly to engage the public’s interest at an earlystage in new note planning. This strategy backfired for theUS$100 and the new Swiss and euro series. All were announcedpre-issue, only to fall victim to production problems with thenew security features. CN predicts that central banks will bemore cautious about public pronouncements until their select-ed technologies are proven.

Test circulation: Related to this, more innovative featureswill make their appearance in commemorative circulating notesbefore transitioning to circulating notes. Central banks wantinnovative features, but they also want these features to beproven in a manufacturing and circulation environment. Oneway of achieving this is to trial such features in circulating com-memorative notes. There is nothing new in this; Thailand, forexample, frequently uses commemorative notes for this pur-pose (for example, the first use of OVI was in 1988 on the com-memorative 60 Baht), as does Kazakhstan. But CN foreseesmore central banks, not accustomed to issuing commemorativenotes, following their example - Argentina and Morocco beingtwo recent cases in point.

Keeping it simple: The watchword for new security fea-tures is now ‘simplicity’, exhibiting clear and unambiguouseffects easily explained and understood by the general public.Optically variable effects such as those provided by hologramsand colour shift ink or threads led the way, and still have animportant role to play. But the past few years have seen twoLevel 1 overt security features emerge - Motion and SPARK® –where the simplicity of the visual effects belies the complexityof the underlying technology. We can expect both more ofthese, and a number of similar technologies, to become com-monplace in banknotes in the years to come.

Integration: Another watchword is integration. The highcost of security features is now such that they need to be opti-mised both for security and for aesthetic reasons. The newEuropean Europa series will display this trend if the new €5,launched in January 2013, is followed by the other denomina-tions in the Euro series II, while the latest display of ‘housenotes’ at Banknote 2012 gives an idea of what can be achieved byimaginative use of intricate design coupled with the latestsecurity features.

Coin innovation: It is likely that there will be more inno-vation in coins, which are now under threat from two sides.One is the evolution of low denomination durable banknotesubstrates, and high value coins need to be more secure if theyare to maintain their position at the coin/note boundary. Theother challenge is from cashless alternatives that now threatento impact micro-transactions. The advent and proliferation of

technologies such as NFC and m-payments means that the coinindustry will have to make coins more cost-effective, function-al and attractive to use.

Public verification: Variations of the ‘feel/look/tilt’ messagewill remain key to public recognition of security features.However, the smartphone will start to make a significantimpact – not just as an additional means of providing informa-tion to users about their notes, but also as a verification tool.The first to address this opportunity are Orell Füssli withStarPerf, and Giesecke & Devrient with MAGnite. Others willfollow.

Sector rationalisation: Global banknote demand exceeds160 billion notes per year and the total supply in both the pri-vate and state-owned sectors is probably 200 billion notes peryear. CN expects that more state-sector suppliers – print worksand paper mills – will try to enter the commercial banknotesupply market. State sector assets may be subject to privatisa-tion and closure, and others may enter into cooperative ven-tures where the costs of investment and market developmentare shared between the state and commercial sectors.

Self sufficiency: One of the characteristics of the pastdecade has been moves towards self-sufficiency in productionin countries with rapidly-developing economies and demand forcash. India, the Philippines, Chile and Indonesia are all exam-ples of countries following this trend. It is likely that banknoteproduction will be set up in the Middle East while China,already very largely self-sufficient in paper and print, will con-tinue to power growing demand for currency.

Automation: Cash circulation processes are still disjoint-ed and manual, despite advances in hardware and software,electronics, robotics, and communications technology, and CNpredicts much greater automation – at the branch or retail out-let, cash centre vault.

The key is not only technology (there are already numerousexamples of major advances in, for example, cash recycling –which will become the norm – or central bank vaults that runalmost entirely with robots). What is key is that companieswork with one another to provide standardised solutions thatenable a seamless transition from the moment cash is deposit-ed to its redistribution (or destruction).

All of the above predictions are for incremental changes.The biggest potential game-change is, of course, the impact ofalternative methods of payment, such as e-commerce or thenext generation of cashless payments driven by NFC andmobile technology. Our prediction as to the impact of this issimple – who knows? No-one does.

There is little the industry can do about e-commerce, butthe best way of minimising the impact of the next generation ofcashless payment technologies is to ensure that notes and coinsbecome even more efficient and cost-effective, retain publicconfidence and are easy and attractive for the public to use.

Therein lies the challenge for the next ten years, and CNlooks forward to a further decade in covering how the market ismeeting this challenge.

Company NewsJanuary 2013 | Vol 11 | No 1 Currency News |


‘Call to Arms’ Over Banque deFrance Plans to Spin-off Paper MillAccording to a recent news bulletin fromone of France’s trade unions, the Banque deFrance (BdF) dropped a bombshell when itannounced the impending spin-off of itspaper mill in Vic-le-Comte. Although theunion had been aware for several years thatBdF was considering measures that wouldlead to such an eventuality, it did not thinkit would happen so soon.

The paper mill has reportedly become afinancial handicap to BdF’s banknote-pro-ducing division, a situation that led BdF toconsider three possible courses of action

First is a ‘quick death’ scenario, ie. closethe mill at the end of 2015, and absorb allredundancy costs, with total closure costs of€54m.

Second is ‘slow death’, by graduallywinding down operations until the completecessation of activities in 2030, with thenumber of employees naturally dwindling asa result of retirement. This would involve an€86m loss to BdF, spread over 15 years.

And third is ‘new life away from BdF’involving the investment of €70m in thepaper mill to increase production capacity,including a wide-width papermakingmachine, a new building to house themachine, and a new cutter.

Not surprisingly, BdF has opted for thethird course of action.‘Public Centre’

BdF’s current papermaking technologywas installed at a time – pre-euro – when its

printing plant was equipped with web fedtechnology only, and is at a disadvantage in amarket where production in multiple super-size sheet format is becoming the norm. Amodern machine, with a capacity of around7,000 tonnes per year, would be far in excessof the BdF’s own needs, either for the euroor for its export work (which is primarily forcountries that were former French colonies).

In order to drum up enough orders to fillthe increased capacity, therefore, BdFintends to create a ‘public centre’, togetherwith the central banks of Italy and Austria,in the form of an integrated subsidiary. Asthese two banks do not have paper mills oftheir own, the subsidiary would allow themto buy paper from BdF, therefore bypassingthe tender procedure. BdF would own atleast 51% - but more likely 90-95% - of thesubsidiary.Next Steps

The trade union reports that BdF hasidentified specific action steps, with a viewto starting up production under the neworganisation by mid-2016: • Send a formal communication to theBanks of Italy and Austria, with an answerexpected within three to four months;• Launch call for tender mid-2013 fornew papermaking machine;• Create subsidiary late 2013;• Launch call for tender late 2013 forconstruction of the new building, choosebuilder mid-2014, complete building end

2015;• Construct new papermaking machinein 2014/2015, install and test machine atVic-le-Comte end 2015/beginning 2016,start up production six months later.Union’s Position

Although the union is happy about theforeseen investments in the paper mill, aswell as the creation of a ‘public manufactur-ing centre’, it is sceptical about whether thenew subsidiary will remain public, even if itis set up with other central banks. Theunion’s ideal vision of a ‘Banque de France’lies firmly in the public sector, as a ‘servant’to the community, and an indivisible wholethat combines headquarters, manufacturingand administrative centres.

The union is also convinced that themeasures envisaged for the Vic-le-Comtepaper mill will quickly spread to the Banquede France printworks at Chamalières, andstates in its bulletin that these fears wererecently confirmed by the head of the ban-knote division, George Peiffer, when he saidthat if the ‘public centre’ mechanism provessuccessful for the paper mill, it could pro-vide a trampoline for the same kind of struc-ture at the printworks.

With this in mind, all union employeeshave been called to a 24-hour strike in Parison 22 January, to voice their position withregard to the paper mill, the printworks, thebanknote division, and the Banque deFrance as a whole.

Modernisation at Casa de Monedade Chile on CoursePreparations for the installation of a newSuperline at the Casa de Moneda de Chile(CdM) are running according to plan. The$90m investment involves not only the pur-chase of a new line but also the reconfigura-tion of the existing premises, with 6,000 sqm being remodelled to house both the newline and the existing line, along with pre-press and ancillary services.

The existing line stopped production inSeptember and is currently being moved. Itwill be restarted this month in the newbuilding, the foundations of which have

been laid for a flat platform on which thetwo lines, old and new, will run side by side.

The new equipment (offset, intaglio,screen, CutPak, SuperNumerota etc) will bearriving at the end of February. Followinginstallation and commissioning, CdM willstart production on the new line at the endof June. Initially, this will be for exportorders (eg. the continuation of its supplycontract for Argentina).

The next milestone, however, and one ofthe principal reasons behind the investmentin the first place, is the forthcoming tender

for Chile’s banknotes. This will be held in2013, with delivery for the following year.The Central Bank of Chile upgraded itsnotes in 2009 but CdM was unable to printthem as it had neither the capacity nor thenecessary technology.

According to CdM’s Francisco Mandiola,‘after an absence of five years, it is one of ourmain goals to be able to supply Chile again,now that we are – or soon will be – technical-ly able to do so.’

Company News


January 2013 | Vol 11 | No 1 Currency News |

Brinks Partners with Wincor Nixdorfas CashEDI Becomes CompulsoryWincor Nixdorf and Brinks Deutschlandare to expand their cooperation in orderto increase the efficiencies of cash han-dling processes for banks and retailers.

The cooperation involves setting upjoint processes for Wincor Nixdorf ’sCash Cycle Management Solutions (CCMS),including the deployment of standard-ised cash cassettes that can beexchanged between all the terminals inits CINEO range. As the CIT company,Brinks will be able to exchange the cas-settes between the dispensers, recyclingsystems and ATM safes of the bankbranches and stores that it regularly

services, thus helping these to achievean optimal balance of cash and reducingthe amount transported per branch orstore.

According to Wincor Nixdorf, thecooperation also means that bank andretail customers will in future enjoy thebenefits of a compliant and transparentcash order management system withstandardised interfaces and processessupplied by CashEDI.

CashEDI (Cash Electronic DataInterchange) was developed by theBundesbank some five years ago (seeCN Vol 6, No 8) as a standardised elec-

tronic data exchange system to improvethe transparency, security and efficiencyof cash payment operations in Germany.It enables cash lodgements to be settledand cash-related data exchanged elec-tronically by professional cash handlers(ie. banks and CIT companies) amongthemselves as well as with theBundesbank in real-time.

As of January 2013, its use is nowcompulsory for settling cash paymenttransactions. Wincor Nixdorf was one ofthe first certified partners for CashEDI,enabling it to offer cash replenishmentand pick-up services to its customers.

People in the NewsGerry Gaetz, the Bank of Canada’sChief of Currency, is to join the CanadianPayments Association, the operator ofCanada's national clearing and settle-ment systems, as President and CEOwith effect from March 31. He has heldvarious senior positions during his careerwith the Bank including, in 1996, leadinga major initiative to re-engineer and con-solidate the Bank’s currency operationsacross the country. In his current role, towhich he was appointed in 2008, he hasimplemented a new strategy for the cur-rency function and overseen the launchof Canada’s new banknote series, as wellas the development of a new bankingsystem to support Canada’s payment sys-tem functions.

Crane & Co has announced the appoint-ment of Iván Montoya to the compa-ny’s Board of Directors. He was formerlyTreasurer of the Central Bank of Chile,during which time he reformed the cashmanagement function and led the devel-opment and introduction of the coun-try’s first new series of banknotes in 30years.

Authentix has appointed Bernard CBailey as Chairman and Chief ExecutiveOfficer, replacing David Moxam. He

was formerly President and CEO ofViisage Technology, Inc, a provider ofadvanced technology identity solutions,and has served on the Authentix Board ofDirectors since 2011. The company hasalso announced the appointment ofKevin McKenna as President, Currencyand Secure Documents. He joins thecompany from HID Global, where heserved as a Vice President of Sales deliv-ering secure document solutions to gov-ernments worldwide.

Dr Al f redKraxenbergerhas j o inedLouisenthal asM a n a g i n gDirector forTechnology andInnovation. Hisresponsibilitiesin this newly-cre-

ated position include R&D, technology,project management relating to industri-alisation, and strategic technology mar-keting. Dr Kraxenberger started hiscareer in 1996 as a software engineer atG&D. In 2006 he became Head ofProduct Management and Support forbanknote processing systems and hasalso been in charge of the division’s secu-

rity features business for the last twoyears.

In a tribute to his retirement after 46years in banknote and security printing,

the organisers ofBanknote 2012gave BrianFlutter ofKomori CurrencyTechnology thisyear’s LifetimeA c h i e v e m e n tAward for hisservices to theindustry. Brianretired as

Managing Director at the end of 2012after a career that his taken in bothKomori and, before then, BradburyWilkinson.

The Brink's Company has named MelParker as President of Brink's NorthAmerica, with responsibility for the com-pany’s commercial and operational busi-ness of Brink's in the US and Canada.The company has also appointed PattyWatson to the position of ChiefInformation Officer, with responsibilityfor implementing information technolo-gy and process improvements.

Brian Flutter with Banknote2012’s Lifetime AchievementAward

Special ReportJanuary 2013 | Vol 11 | No 1 Currency News |


US Study on Alternative Coin MetalsNeeds More WorkLow denomination coins can cost more thantwice their face value to make and distribute- at least as far as the US penny (one cent)and nickel (five cents) are concerned. Andgiven the rising cost of the metals used tomake these coins - mainly copper and nickel- the challenge of how to make them morecheaply, while maintaining their quality,durability, size and appearance, becomesmore pressing.

It is for this reason that the US Mintcommissioned a study to find out whichalternative, cheaper metals could replacethe copper and nickel of pennies, nickels,dimes (ten cents) and quarter-dollars. (Thecurrent penny is composed of copper-platedzinc, the nickel of monolithic cupronickel,and the two higher denominations ofcupronickel-clad copper.).

The three objectives of the study wereto (1) reduce the costs to produce circulat-ing coins, (2) consider key stakeholders and,to the greatest extent possible, minimizeconversion costs that would be necessary toaccommodate significant changes to all cir-culating coins simultaneously, and (3)address critical performance attributesincluding physical, electromagnetic,mechanical and chemical properties.

The 400-page study, which has nowbeen published, was undertaken byPennsylvania-based Concurrent Technolo-gies Corporation (CTC), and involved twoyears of trials conducted at the PhiladelphiaMint, where a variety of metal recipes wereput through their paces. It also included anenvironmental impact study of each ‘recipe’,as well as an external opinion poll to ascer-tain which coin changes would - and wouldnot - be well-received.Methodology

Using the metal prices defined on theLondon Metal Exchange, CTC identifiediron (and steels), zinc and aluminium alloysas leading potential replacements.

The metals were evaluated in three dis-tinct forms: rolled strip, ready-to-strikeplanchets, and struck pieces. Parallel testswere performed on both incumbent coinagematerials and alternative material candi-dates.

The test programme consisted of:• Measuring basic material properties ofhardness, tensile strength, steam corrosion,

grain size and electro-magnetic signature(EMS);• Evaluating edge thickness, diameterand tonnage of the struck alternative mate-rial candidates, and their ability to fill thefine details of the coin die;• Testing corrosion resistance and wearof the struck pieces, and the ability of exist-ing coin-acceptance equipment to discrimi-nate and accept them without having toundergo significant upgrades.

For the striking trials, the Mint struckone-cent, five-cent and quarter-dollar coinswith ‘nonsense dies’ - images that don't existon legal tender (Martha Washington, thefirst First Lady of the US, is a favourite sub-ject) but which are similar in depth anddesign to real currency. A total of 25 uniquematerial-denomination combinations werestruck with these dies.

Some of the combinations were seamlesscandidates - with about the same EMS andweight as the incumbent coin - whereas theothers were non-seamless, with a differentEMS and/or weight. CTC Recommendations

Based on the study findings, CTC madesome detailed recommendations to the USMint: • Maintain coin dimensions (thicknessand diameter) for all future coins, regardlessof composition, since the conversion costsfor coin-processing equipment would be toolarge to justify any changes.• Maintain the current composition forthe penny. Copper-plated steel pennieswould offer no cost savings over the currentcopper-plated zinc. And the low density ofaluminium alloys would jam or destroy coin-handling equipment, removing this compo-sition from consideration.• Further develop copper-based alloys forthe nickel (five cents). These would have ayellow or golden colour, which would meanan important colour change for the nickelbut which, according to the opinion poll,would be readily accepted by the public.Although these alloys would not bring coststo parity with face value, they would pro-duce material cost savings of up to $17m,with conversion costs for coin-acceptanceequipment of up to $56m.• Consider copper-based alloys for thedime, quarter-dollar, and half-dollar coins.

The Mint would save approximately $2mannually for the quarter and $4m for thedime. Coin-acceptor conversion costs wouldbe around $9m for the quarter and $7m forthe dime.• Continue long-range research of sur-face engineering of zinc or steel for thepenny as a useful technology to reduce costsassociated with copper-plating. The reportmentions the example of inexpensive paintsor coloured particles on bare zinc coveredwith a wear-resistant coating.• Continue research on stainless steel asa potential alternative for lower denomina-tions. Also continue development of stain-less steel alloys clad to copper alloy for high-er denomination coins to mimic the currentEMS of the dime, quarter, and half-dollar. Mint’s Conclusions

All in all, valuations of the 29 differentcombinations revealed that none fully metthe ideal list of attributes and that moretests were therefore needed.

‘We want to let the data take us where ittakes us’, said Richard Peterson, the Mint’sacting director.

According to Mr Peterson, ‘a slightreduction in the nickel content of our quar-ters, dimes and nickels would bring somecost savings while keeping the magneticcharacteristics the same. Making more sub-stantial changes, like switching to steel orother alloys with different magnetic proper-ties, could mean big savings to the govern-ment but at a big cost to coin-op businesses.

‘With the price of steel, aluminium andzinc being pretty close to each other, thereare promising alternatives for the nickel,dime and quarter’, he continued. ‘Therewouldn't be any advantage to shift the com-position of the penny, so we offset that costwith savings from other denominations’.

Two areas in particular were identifiedfor additional work. One is to conduct pro-duction-scale tests with multiple lots of pro-posed coin materials to verify the potentialand the results from the preliminary tests.The other is further research into estimatedstakeholder costs associated with change tothe EMS. As a result, the Department of theTreasury has recommended that the Mintcontinues to study the issue before endors-ing any changes to compositions.

In the News January 2013 | Vol 11 | No 1 Currency News |


symbol of European integration. Despitethe challenges facing the euro area, progresswas made in 2012, and I am confident that2013 will bring a deepening of economicand monetary union and will strengthenEuropean integration’.

Besides the ECB’s core function andmandate to guarantee price stability in theeuro area, Mr Draghi maintained it was akey task to develop ‘our product’, ie theeuro banknotes. ‘The new series will con-tinue to reflect the unity and diversity ofour continent. The word euro is now writtenin the Cyrillic as well as in the Latin andGreek alphabets. Today 332 million peoplein 17 countries use euro banknotes everyday. And worldwide, the value of euro bank-notes circulating is roughly the same as thatof US dollar bills. Last month that value wasalmost €913 billion, with around one quar-ter of that value circulating outside of theeuro area, notably in its neighbouringregions. The euro is in fact being increasing-ly used as a global currency.’

In closing the opening ceremony, MrDraghi referred to the fact that, with 15.7billion euro banknotes in circulation, theeuro was a success story. The ECB he said,

unveiling and exhibition, and throughupdates on www.new-euro-banknotes.eu.As well as details of the press launches, thisnew website now features a comparison ofthe old and new €5 banknotes (visual andsecurity features) and hosts the ‘Euro CashAcademy’, a comprehensive interactiveeducational programme.

would ‘strive to ensure the banknotes aresteadily developed and enhanced and arestate-of-the- art in terms of security andtechnology. The Europa series will besmarter and even more secure than the cur-rent series.’ He ended by thanking thedesigner of the series, Mr Gerstetter, whowas present, and then signed the first euronote of the Europa series.

The new €5 is intentionally very simi-lar in appearance to the old €5 for continu-ity. It has the same buildings on the frontand back and the colours are very similar.

But there are several notable improve-ments, such as a much bolder ‘5’ on thefront (intaglio) and back; light areas on thefront and back for clarity of the watermark;a series of short dark raised lines (intaglioprinted) on the left and right edges on thefront of the note for feel and to aid the visu-ally impaired; and sparse, reversed-out(demetallised) ‘€ and ‘5’ indicia instead of‘EURO 5’ in the embedded thread.

Then there are the new security fea-tures – the portrait hologram, the boldSPARK® emerald-coloured ‘5’ whichchanges to blue on tilting and has a rollingbar effect, and the portrait watermark makeit noticeably different. This strategy of‘similar but easily-distinguished’ will applyto all banknotes in the series, as will thenew security features, as they are easy tocheck in the ‘feel, look and tilt’ method.

Issue of the new €5 note will start onMay 2, with the other denominations intro-duced over the next few years in ascendingorder. The new banknotes will co-circulatewith the old, which will gradually be with-drawn and eventually cease to be legal ten-der.

The public awareness campaign, whichbegan last November with the announce-ment of the new banknote (see CN Vol 10,No 11), has gained momentum with this

New €5 Makes it Debut...cont

Bank of England Floats £1 Billion Tender...cont

The original Europa vase that provided the inspiration,and hologram portrait, for the new series

Euro CounterfeitsFall in 2012No sooner had the new €5 beenlaunched than the ECB published itsbiannual information on banknotecounterfeiting.

In 2012 a total of 280,000 counter-feits were withdrawn from circulationtaking the total for 2012 to 431,000,which was 12.4% lower compared withthe figures for 2011. But in the secondhalf, there was an increase of 11.6%compared with the previous sixmonths.

The number of genuine eurobanknotes in circulation during thesecond half of 2012 was 14.9 billion,putting the number of counterfeits atjust under 30 per million.

The €20 and €50 denominationscontinue to be the most counterfeitedand together accounted for 82.5% ofthe total in the second half of 2012;during this period the share of coun-terfeit €20 banknotes increased whilethat of counterfeit €50 banknotesdecreased, reversing the pattern of theprevious six months. The €100 wasthe third most counterfeited denomi-nation, accounting for 13% of thetotal; these three accounted for 95.5%and the other four denominationstogether only 4.5%.

management contract. This prompted aflurry of media speculation in the UK thatthe Bank is planning to introduce polymernotes, although it is, in fact, simply givingthe Bank – which is considering variousoptions to improve the durability of the £5note in particular – flexibility in futureplanning.

Bidding operators must have at leastthree years of experience in commercialbanknote printing and have printed at

ago followed a review in early 2002 whichconcluded that, in light of falling volumes,the best way to secure the future of thestaff was to privatise the operation. Publicconcerns that production could move intoforeign hands were overcome by the awardof the contract to a British printer, but willbe revived again should one of the otherbidders be successful.

DLR has commented, meantime, thatis has a good relationship with the Bankand is very keen to win the new tender.

least 500 million banknotes over a 12-month period at one site in the past threeyears.

The deadline for parties to submittheir interest is the end of this month. Thenew contract will take effect in April 2015,following a six to twelve month transitionperiod if the supplier changes, and willinclude the option for a three year exten-sion.

This is only the second time in its his-tory that the Bank has put production outto tender. The decision to do so ten years

Technology FeatureJanuary 2013 | Vol 11 | No 1 Currency News |


Russian (left) and Belorussian (right) banknotes showing different variations of Mobile image movement.

“Mobile” Breaks New Ground inOptically Variable ThreadsWide windowed security threads havebecome one of the most successful publicfeatures in banknotes, with the securitythey afford lying not only in the often high-ly complex technology used to make thethread itself, but also in the manner of itsintegration into the paper during the cylin-der mould paper making process (or intoone of the new multi layer substrates).

The best security threads are both veryeye catching and to easy to authenticate ina straightforward and unambiguous manner.But, until fairly recently, such threads werelimited to holographic and colour-shiftingtechnologies. This changed, however, withthe introduction of Crane’s Motion™ threadon the Swedish 1,000 Kroner in 2006, withthe (apparently) floating, coloured iconsmoving in a defined manner adding a newdimension. Trend for Lens-Based Images

The technology is based on moiré inter-ference using micro-optical lenses and‘printed’ images. Lens-based images nowrepresent a new trend in security threads,as can be seen in a new technology fromGoznak.

This new optically variable thread tech-nology, marketed under the name of Mobile,was introduced in September 2011 and hasnow been used on four currencies (two ofwhich have yet to be disclosed). Althoughit, too, is based on lens technology, it is dis-tinctly different in appearance and technol-ogy from Motion in that the images aremade up of dots and appear to move in spe-cific but different directions depending onthe angle of tilt.

The core technology behind Mobileresides with Computer Holography Centreof Moscow, a company specialising in elec-tron beam lithography. For well over 15years the company has produced visuallyattractive, yet technically complex, highlysecure holograms or DOVIDS (diffractive,optically variable, interference devices),but Mobile is different.

The feature relies on an array of flatoptical elements, commonly known asFresnel lenses (after French physicist andengineer Augustin-Jean Fresnel). These are

arranged on a flat, metallised foil base toform a micro-relief in the shape of desiredimages - such as the denomination value inthe case of the Russian 5,000 Ruble ban-knote, or the Bank’s initials in the case ofBelorussian 200,000 Ruble notes. Whenilluminated with a point source light, themicro-optical lenses synthesise the imagesfrom small individual bright dots arrangedin a manner to form the desired shape,which appears to move on tilting the sub-strate.Appearance of Movement

A Fresnel lens has a thin layer of con-centric grooves resulting in a ribbed struc-ture with depth and width that arematched to diffract the incident light.Curved surfaces focus light by refractionand are patterned to reflect it. They workin the same way as mirrors, effectivelyreflecting the point source light in the formof a spot back to the viewer. As the viewingangle is changed or the position of the pointsource light is moved, reflected light travelswithin the individual lens diameter to givethe appearance of movement.

On Mobile, the lens diameter is typical-ly around 1mm, although this can be varieddepending on design and thread width.Each lens is aligned to partially overlap theadjacent lens, which increases image move-ment amplitude and extends the travelingrange of the reflected light. On theBelorussian note, with optical elementsoverlapping each other by 50% and imagessized just less than 3mm, the movementeffect achieved is 2mm in each direction.

Two types of Fresnel lens - negative andpositive focal length, off-axis lenses - have

been used to further enhance the visualeffects. When tilted backwards the formerwill shift reflected light against the viewer,while the latter will move it towards theviewer. In a similar way, tilting the formerto the right will move the reflection to theright while the latter will force it to be dis-

placed in the opposite direction - combin-ing the two next to each other results in thesimultaneous movement of images in twoopposing directions.

Thus, in the 5,000 Ruble note, the firstand third numerals will always shift in theopposite direction to the second and fourthnumerals. Similarly, on the Belorussian notethe first two initials will move in the oppo-site direction to the following two. Allmovements are multidirectional. Low Cost Manufacture

Fresnel lenses have the advantage thatthey can be manufactured at relatively lowcost. The same techniques and equipmentare used as those for manufacturing holo-grams as, like holograms, Fresnel lenses aremicro-relief structures but with a depth of0.1-0.3 of a micron. The end product forbanknote applications is either a hot trans-fer foil or a film for threads or stripes whereapertures are present.

Continued on page 8

Two off-axis Fresnel lenses: negative focal length (top)and positive focal length (bottom)

Technology NewsJanuary 2013 | Vol 11 | No 1 Currency News |


Mobile...cont

Finished threads with Fresnel micro-optical systems are around 25 micronsthick, allowing easy integration into thepaper in various shapes and sizes usingexisting production processes. The feature

ple. Mobile images cannot be replicatedusing laser or dot-matrix origination tech-niques – a charge commonly laid againstholograms - and, according to Goznak, aredurable so will retain their propertiesthroughout the banknote’s circulation life.

is not affected by varnishing, so notes canbe coated for enhanced durability.

Mobile images are extremely difficultto imitate, not least because e-beam sys-tems are not readily available and cost sev-eral million euros. Also, the ability to usesuch devices is known only to very few peo-

MAGnite® - a New MobileMagnetic Response Feature MAGnite® is a new security feature with adifference – it uses Level 2 security tech-nology to generate a pseudo Level 1 opti-cally variable effect. The rationale behindthis latest technical development is basedon the premise that conscious authentica-tion of Level 1 features takes place only onrare occasions and typically involves the

feel/tilt/look concept, whereas traditionallyoptical security features are identified byviewing at different angles, directly and intransmitted light. Giesecke & Devrientreasons that the more sophisticated securi-ty features have become, the more first lineauthentication has shifted to the point ofsale, ie the cash handler. And this is whereMAGnite® is designed to excel.

MAGnite is a magnetic security feature.But instead of only being detectable andreadable by a machine with a sensor, in thiscase an optically variable effect can be cre-ated by magnetism. This is achieved in acompletely novel manner using micro-engi-neered pigments with magnetic propertiesthat are safely enclosed in durable micro-capsules.

The micro-capsules are used to createan ink which is applied to banknotes by silkscreen printing. The application techniqueensures that the micro-capsules are uni-formly distributed across the printed area,with sufficient density to create a homoge-neous display area. In addition, the micro-capsules come embedded in a UV curingbinder for maximum durability, enablingthe feature to last for the full circulationlifetime of the banknote.Interactive Visual Feature

The specific micro-encapsulationtechniques enable full rotational mobilityof the pigments so that when a magneticfield is applied, the capsuled magnetic pig-ments become instantly aligned with themagnetic field. This causes a visible changein appearance with high contrast in theprinted area.

This change takes place as the func-tional ink (with millions of micro capsules)allows an infinite number of switchesbetween two physical states – ie. each indi-vidual micro capsule is either affected bythe magnetic field or not, and so is either‘on’ or ‘off ’. The topography of the initiat-ing magnetic field becomes directly visibleon the printed area, similar to a digitalscreen, and can immediately, and clearly, beseen.

In practise, the phenomenon is verymuch like the sudden appearance of a win-dow in the banknote, allowing the image onthe other side to be seen, especially as theimage stays still when the banknote ismoved.

A MAGnite patch can be authenticatedby the general public via readily availablemagnets, eg. common cell phone speakerswhich have small magnets that alreadydeliver a sufficient magnetic field strength,

The magnetic field causes the pigments in MAGnite to becomealigned and hence visible – as seen here by the shape of the speakerin the mobile phone behind the note, which appears in the printedMAGnite patch

even when the devices are turned off. Specifically-designed magnets, eg. a

retailer’s logo, could be used for POS bank-note verification devices – with the logogenerated once the printed patch is placedover the magnet.

In all cases, the striking optical effects

produced are largely immune to ambientconditions at the point of transaction andso can be specifically checked by users.Hands-on Security and MachineProcessing

MAGnite allows an immediate andunambiguous response initiated by meansof a generally-available device. Further-more, the presence of the feature and thesignal level can also be automatically iden-tified with the aid of magnetic sensors inprocessing machines. As a result, only (fit)genuine banknotes with a functioningMAGnite security feature will be returnedto circulation.

Magnetically-orientated micro-capsules (top) and the effectsof these when exposed to a magnet (below)



StarPerf – First Feature for SmartphoneVerification

New Generation of Cloud-Based,Cardless ATMs from Diebold

StarPerf® from Orell Füssli, which waspresented at Banknote 2012, is morethan just an innovative security feature.It is also, in what is a first for the ban-knote industry, a feature that can be ver-ified by smartphones.

StarPerf is an arrangement of high-precision microperforations that can varyin size and shape, and that can be gener-ated in specific patterns. These perfora-tions are resistant to soiling, wear andtear, and provide long-lasting security tothe banknote, even under harsh condi-tions.

They are also completely invisible inreflected light, but become clearly visiblein transmitted light. By arranging theperforations in determined patterns, it ispossible to incorporate additional note-specific information like, for example,the denomination or year of production.

StarPerf can easily be detected andverified by the naked eye. But it can alsobe verified by smartphones – therebyuniting the properties of Level 1 and 2security features.

The feature is verified thanks to anapp developed by Orell Füssli. The note

is held against a light source and scannedwith the smartphone’s camera from ashort distance. In the space of 2-3 sec-onds, the app will verify the presenceand specific pattern of the StarPerf fea-ture, and hence that the note is genuine.The app has been developed so that itcan identify the feature from both sidesof the note, and regardless of the orienta-tion of the note relative to the phone.

Banknote apps already exist in themarket – but thus far these have been for‘educational’ purposes – ie. to deliverinformation on banknotes and their fea-tures (or, in the case of the BEP, as a

device to enable the blind and visually-impaired to verify the denomination).

So Orell Füssli’s feature/app combi-nation is the first that performs a verifi-cation function. It does, however, alsoserve as an education platform by dis-playing text, pictures and animations.Users are offered a choice by the app -verification or information.

According to Orell Füssli, while theverification function works only withStarPerf at the moment, other newdevelopments that can similarly bedetected and authenticated via smart-phones are in the pipeline.

Diebold has unveiled its vision of a newgeneration of ‘millenia-inspired’ ATMsthat will bridge the gap between its tech-nology and that of mobile communica-tions.

Key to the new generation is a con-ceptual ATM interface that borrows fromthe touch screen, navigation and controlsthat are now familiar on smartphones.

It also provides a platform for cardlesstransactions, whereby pre-registeredbank customers scan a QR code on theATM using their phones. When thedevice ‘syncs’ with the cloud, a transac-tion screen appears on the handset, onwhich the customer selects the amount

to be withdrawn. The cloud server thensends a one-time code to the phone,which the customer enters onto theATM screen to authenticate the transac-tion and receive the cash.

According to Diebold, its systemreduces risks associated with lost orstolen cards and skimming, while privacyis boosted because details are enteredonto the private phone rather than thepublic ATM, The authentication coderelates to each transaction only, andimmediately expires on completion.

Furthermore, says the company, byusing cloud-based services, the featuresdo not require onboard computers, which

means reduced power requirements. Andhardware costs are cut because no cardreaders or receipt printers are needed.Transaction receipts are delivered viatext or e-mail.

The company plans to launch pilot-testing of the ATM later this year.

Commenting on the conceptualATM, Frank Natoli, Diebold’s ChiefInnovation Officer, said: ‘mobile devicesare driving user experience expectationsin all facets of commerce. It was only amatter of time before the familiar multi-touch interface style made its way to theATM’.

From left to right, (1) the user starts the app, (2) the user can choose between two modes - verification or description, (3) theuser selects the StarPerf option, (4) the smartphone scans the banknote for the StarPerf pattern, and (5) a confirmation isdisplayed that the StarPerf pattern has been successfully detected



Ultra Durability from Oberthur Fiduciaire During the last Banknote conference, in2011, Oberthur Fiduciaire launched itsnew security feature Securicoat® to pro-tect banknotes from soiling and increaselife span. Securicoat is a first level securi-ty feature consisting of two UV printedvarnishes, matt and glossy, with intaglioembossing. Since its release, the featurehas already been included in over 770 mil-lion banknotes.

According to Oberthur, requests bycentral banks to further improve banknote performance have led it toenhance the water and oil repellence ofthe feature. Securicoat® ULTRA is theresult.

In his presentation at Banknote 2012,Dr Florian Demaimay, Production

Director at Oberthur Fiduciaire, intro-duced this ‘Ultimate Durability’ solutionwhich enhances durability and cleanlinessto extend the lifecycle of banknotes. It is,he said, an ideal choice for its extralipophobic and hydrophobic properties.

As a varnish-based Level 1 securitysolution, Securicoat ULTRA protects thewhole note, including printed and appliedfeatures. Additionally, it allows for easydesign integration into the banknote and

is fully compatible with all substrates. It offers full resistance to water, a

unique oleophobic property, and hasexcellent soiling resistance. As such, it isparticularly suited for tropical climates,and for low and middle denominations,which are more exposed to wear andaccelerated ageing.

The cost, however, is notably lowerthan most complex durability solutions onthe market today.

Arjowiggins Launches Diamone®XtraInitially, the growth in the use of durablepaper was slow, accounting for only 2 bil-lion banknotes by 2005, but as evidence ofimproved circulation life became appar-ent, the growth rate increased; by 2012around 16 billion banknotes were pro-duced using durable paper, a compoundannual growth rate of around 30%.However, given that the amount of paper-based banknotes produced globally in2012 was around 150 billion, only around10.7% used durable paper, so there is stillhuge potential for growth

Arjowiggins has played a leading rolein the development of durable substrates,launching Diamone® in 2002, followed byDiamone®Composite (cotton with polymerfibres ) in 2005 and now Diamone®Xtra in2012.

Arjowiggins regards durable substratesas falling into two categories: those havinghigh durability (coated papers, reinforcedpapers and composites), where a bank-note’s lifetime increases up to two times,or very high durability where the lifetimeis around three times or above that ofstandard banknote paper. Guardian® poly-mer substrate falls into the very highdurability category, as should De La Rue’snew Flexycoin (also100% polymer), and itis likely that composites (Durasafe®,Hybrid® etc), where polymer forms oneof the layers, will also achieve this status.

Arjowiggins maintains this is whereDiamoneXtra represents a major break-through, as it is the first substrate to fallin the very high durability category thatdoes not contain a polymer film and ismade of 100% cot-ton.

The durability ofDiamoneXtra isachieved throughspecial coatings –first a base coat andsecond a top coat.The base coat pro-vides protectionagainst soiling andthe top coat ensureshigh ink adhesion.

The coatings areintegral to the sub-strate and there isno risk of delamina-tion, and in combination they provide avery high level of protection against dirt,grease and water.

While the product has yet to beproven in the field in a live circulation sit-uation, a very convincing demonstrationof DiamoneXtra’s anti-soiling capabilitycompared it with a standard cotton sub-strate after immersion in a bath of dirtymotor oil. The standard paper, as wouldbe expected, became very dirty and dis-

coloured whereas DiamoneXtra showedminimal effect.

One of the major attractions ofDiamoneXtra is that it processes just likea normal cotton substrate and acts and

feels like one. No special inks arerequired, the drying time is not extended,ink adhesion is excellent, abrasion resist-ance is increased and all the normal sub-strate and print security features can beembedded or applied respectively with-out modification.

Another advantage, because it handleslike standard cotton paper, is that there isno need to adjust banknote finishing andinspection systems.

Standard paper (top) and DiamoneXtra (below), showing no observable destruction

ConferencesJanuary 2013 | Vol 11 | No 1 Currency News |


The dates for the 2nd Coin Conference,originally scheduled to take place March12-13 in Berlin, have been changed toOctober 28-30.

According to the organisers CurrencyPublications (publishers of CurrencyNews), the success of the inaugural CoinConference in London in 2011 generateda very high level of interest and support forthe second conference. However, due to aheavily-congested industry conference cal-endar in the first part of 2013, a number ofcentral banks, mints and suppliers sug-gested that the event be moved to later inthe year, when there will be fewer sched-uling conflicts.

The decision to move the dates wasalso prompted by feedback that the pro-gramme would benefit by being expandedto incorporate break-out sessions or work-shops, with a more in-depth focus, in addi-tion to the presentations.

The conference will take place at the

same venue - the Palace Hotel in Berlin –but will now be over three, rather thantwo, days. Other than the inclusion of theadditional day for workshops, however, theformat and programme will be the same aspreviously advertised. And the conferencewill still provide the location for the pres-entation of the Best New Coin or CoinSeries Award, part of IACA's Excellence inCurrency Awards for 2013.

The topics of the workshop are cur-rently being finalised, but one will relateto the coin/note boundary and the otherwill focus on coin materials. An optionaltour for central banks and coin issuers willtake place on October 31 of the facilitiesof platinum sponsor Saxonia Mint ofFinland in Halsbrücke.

The Coin Conference is the only spe-cialist event for circulation coins, focusingon design, security and cost-effective pro-duction, as well as handling, distributionand management in circulation. It is aimed

New Dates for the Coin Conference at the government bodies responsible forcoin issue – central banks and treasurydepartments – as well as mints and suppli-ers of materials and equipment for produc-tion, handling, processing, verification,counting, distribution and reclamation.

Commenting on the decision, the con-ference chairman Richard Haycock said:‘We apologise for any inconveniencecaused by the changes. But we are alsodelighted both by the positive response tothe Coin Conference, and to the evenmore positive reaction to moving theevent to a less-crowded time of the yearfor coin professionals. Furthermore,expanding the programme was a particularrequest of those from further afield thanEurope, and moving the dates has enabledus to meet their requirements. The resultwill be a larger and more comprehensiveevent for the benefit of all’.

More information can be found atwww.thecoinconference.com.

In spite of the ongoing difficulties in theglobal economy, last month’s BanknoteConference in Washington DC managed,again, to break all records for attendance.With some 675 delegates, sponsors andspeakers taking part, it was the largest yetin the event’s 15-year history and anincrease of 13% over the last event, in July2011.

The first event was held in 1998 andhad just under 140 participants. Sincethen, however, not only have the numbersgrown, but so has the scope of the confer-ence – which originally focused on sub-strates and features – to all aspects of cur-rency production and its circulation.

The proportion of delegates from endusers (ie. central banks, issuing authoritiesand other government bodies) has alsogrown – from 17% (33 of the 140) in 1998to 37% (244 out of the 675) in 2012.Overall, the delegates came from 94 dif-ferent organisations and 56 countries (notincluding the US).

In terms of geography, the largest

regional representationof attendees was fromEurope (51%), withNorth America at 25%,Asia Pacific at 11%, LatinAmerica and theCaribbean at 6%, Africaat 5% and the Middleand Near East at 2%.

According to confer-ence director Tony Poole,‘we were delighted withthe attendance at thisyear’s Banknote. It hascontinued to grow andgrow, which we see as anaffirmation of our focuson a high quality venueand programme, which makes for anexceptionally positive networking, sharingand learning experience for all involved’.

The programme included over 30 pre-sentations covering a wide range of innova-tions, trends and issues relating to design,security, production, issue and circulation.

Banknote 2012 Breaks All Records –Again

Many of these will be covered in this andsubsequent issues of Currency News,which was the media partner for the event.

The next Banknote Conference will beheld in Washington DC from April 7-10,2014.

Conference organizers John Hanley (left) and Tony Poole (right) with keynote speakerMichael A Cook, Senior Vice President and Assistant Treasurer of retail giantWalmart

Headlines of 2012January 2013 | Vol 11 | No 1 Currency News |


That Was the Year That Was ….. January

US resolves the issue of $1 Presidential coins; foundations laid fornew paper mill in India; cash management companies on theacquisition trail include Loomis, Brinks and CMS; Slovenia paper-maker files for insolvency; the Dutch public responds to study onwhat constitutes a fit banknote; security features for coins taketheir cue from banknotes; Banqit sign strategic cooperation agree-ment with Wincor Nixdorf.

February

Counterfeiting of euro notes and coins both fall in 2011; G4Srestructures cash operations; allegations of illegal payments toagents by Austrian banknote printer spread to the central bank;setback to plans for joint venture for banknote productionbetween De La Rue and the Kenyan government; India’s CentralVigilance Committee gets involved in investigation into supply ofout-of-specification paper; rejuvenation of fluorescence for securi-ty printing; Prosegur expands in Latin America and Europe.

March

Glory announces the acquisition of Talaris; new South Africanbanknote series will honour Nelson Mandela; Armat challengesdecision to give Chilean coin blank contract to South Korean sup-plier; Bank of England conducts durability-in-circulation trials forthe £5; IBDA sets up new Intaglio Engravers Academy.

April

Canada announces that the penny is to be scrapped; CIT compa-nies target Latin America for growth; Pakistan upgrades securityink production; new symbol for the Turkish lira; two reports shedfurther light on the US$100 production delays.

May

Federal Reserve outlines plans for the future of its cash opera-tions; all change for Canada’s currency as the latest polymer noteis unveiled, production of the penny ends and new coins are intro-duced; Philippines pushes ahead with plans for a second newSuperline; Saxonia rebrands and celebrates its 400th anniversary;new technologies based on RFID, secure QR codes and printedelectronics offer opportunities for tracking banknotes; Indiainvestigates how to increase the production of notes and coins;Radece declares bankruptcy.

June

Production of the new US$100 finally gets back on track followingresolution of problems with creasing; political controversy fails toderail contract for Argentinean currency; US Federal Reservetakes a long-term view of the cash supply chain; Banque du Libangives details of strategy to build confidence in currency.

July

ESTA reports a 10-year low for European CIT attacks; a possiblethird option for polymer substrates - Talisman - does the rounds;administrators confirm that Oberthur is in talks to acquire theassets of bankrupt Slovenian papermaker Radece; breakthrough

for Australian police as former Securency executive becomes starwitness for the prosecution; the cost to retailers for handling cashis up to 24% cheaper than alternatives, says new report.

August

Evita note finally sees the light of day in Argentina, 50 years later;economic shift revives the euro note/coin boundary debate; De LaRue celebrates 300 years of papermaking; Glory concludes pur-chase of Talaris; Olympics guarding contract fiasco slashes value ofG4S; melting polymer notes in Canada exposed as urban myth;Japan Mint targets new markets in Asia and the Middle East; eurocounterfeiting at lowest levels in seven years.

September

Future of CVS assured as Argentina Casa de Moneda announces itstakeover; Nigeria announces Project Cure, a currency restructuringprogramme for the Naira; Swiss suppliers caught up in furtherdelays to the new Swiss series; Komori’s development and expan-sion strategy starts paying off; Diebold and NCR both caught upin alleged transgressions of the US FCPA (Foreign CorruptPractices Act); India release details of banknote and coin demand;BEP celebrates 150 years; G&D launches the BPS M5, the latestin its next generation of banknote processing systems; Philippinesannounces that it will be self-sufficient in banknote production by2014.

October

Cash distribution is disrupted in Sweden as one of the main CITcompanies, Panaxia, goes bust amid huge losses and allegations offraud; ECB puts cost of EU retail payment at €130 billion; NCRbuys cash management optimisation software firm Transoft; Gardaannounces privatisation plan; a group of development organisa-tions form the ‘Better than Cash Alliance’ to push for electronicpayments in developing countries; Project CURE in Nigeria put onhold; Mexico introduces low-cost banknote denominator for thevisually-impaired.

November

ECB unveils details of the second euro series; South Africa’s newseries of ‘Randelas’ go into circulation; Reserve Bank of Australiaannounces that next series is now on the drawing board; new cashmanagement association formed for Asia; Diebold scraps plans fora new HQ; Garda privatisation deal gets the go-ahead; Komori’snew presses start rolling in the Philippines; Banqit’s Q-Cash Routerproves its cash recycling concept; Royal Canadian Mint announceswinner of the MintChip Challenge; Future of Cash study paints rosypicture for cash.

December

Banknote and coin production in Denmark merges; Israel unveilsdetails of new note series; Wincor Nixdorf restructures to arrestdecline; Komori wins second contact to supply Bangko Sentral ngPilipinas; Japan Mint wins first export order; Latvia plans to jointhe euro; Brinks sells operations in France and Poland; Innovialaunches new readers for its polymer base film; courts rule infavour of Casa de Moneda de Chile in dispute with Armat.

Note and Coin NewsJanuary 2013 | Vol 11 | No 1 Currency News |


Durasafe Debuts in MoroccoMorocco’s central bank, Bank AlMaghrib, has become the first in theworld to issue a banknote printed onLandqart's new composite substrateDurasafe®. The banknote, the 25

Dirhams, commemorates 25 years of banknote printing at the MoroccanState Printing Works, Dar As Sikkah.

The front of the banknote featuresan intaglio portrait of King MohammedVI, and a magenta/green colour shiftsecurity thread developed byLandqart’s sister company FortressOptical Features. Both are embeddedinside the note yet visible behind aone-sided polymer window. The notealso has a fully transparent polymerwindow embossed with the royal crest.

The new commemorative note isthe first time a 25 Dirham denomina-tion has been issued, and precedesMorocco’s new series of circulationnotes, which itself will include a num-ber of ‘world firsts’. More details willbe provided in the February issue ofCurrency News.

• The Reserve Bank of Fiji has nowissued the country’s new flora andfauna family of banknotes and coins,the designs for which were officially

launched by His Excellency thePresident of Fiji, Ratu EpeliNailatikau, at a special ceremony inSuva in December.

The new series celebrates Fiji’sendemic plants and animals, some ofwhich are believed to be extinct asthey have not been sighted in recentyears. The images replace the portraitof HM Queen Elizabeth II across alldenominations.

The notes, in denominations of $5,$10, $20, $50 and $100, were printedby De La Rue and replace the 2007series. The lowest denomination is thefirst banknote in the world to be pro-duced on De La Rue’s new polymersubstrate. In addition to the new sub-strate, a range of new security featureshave been incorporated into the bank-notes.

The new notes have now all beenput into circulation with the exceptionof the $5, which will not be issued untilApril. According to the Bank, this is toavoid confusion between the old green$2 (which has been replaced by a coin)and the new green polymer $5 note.The old $2 will be withdrawn by March31, after which the Bank will proceedwith the issue of the new green $5.

In addition to the new $2 coin, theother denominations include 5, 10, 20and 50 cents, and a $1 coin. A newsmaller, lighter series was introducedin 2009, albeit with the same designsas the previous series. The new coins,

produced by the Royal Canadian Mint,also feature images of native fauna,replacing the image of the Queen.

• Norges Bank has announced thatwork has started on a new banknoteseries, which will be the eighth for theNorwegian Krone. The project is likelyto take several years, beginning withdecisions on a theme, colours andrange of denominations. No changesare planned for the country’s coins,although the replacement of the 50Krone by a coin may be considered.

According to the Bank, althoughthere are currently few counterfeits incirculation in Norway, the projectneeds to begin now to ensure that thelevel of security will be sufficient toreduce the risk of counterfeiting in thefuture. Specific reference has beenmade to the recent or forthcomingupgrades of currencies in neighbouringor nearby countries - eg the euro,Switzerland, Denmark, and Sweden –and the need to ensure that the securi-ty of Norway’s notes is not inferior.

• President Cristina Fernández deKirchner of Argentina has announcedthat the commemorative 100 Peso ban-knote - which was issued last year tomark the 60th anniversary of the deathof María Eva Duarte de Perón (Evita) -is to become the new 100 Peso circu-lating note. It will replace the currentnote carrying the portrait of the 19thcentury president Julio ArgentinoRoca. The circulating version will fea-ture the numeral 100 in SPARK® witha green to blue colour shift and rolling-bar effect, see-through register, water-mark and 5mm wide Picture Thread™with Eva Peron’s image.

• Bank Indonesia is proposing toredenominate the Rupiah in 2014 byremoving three zeroes. Under theplans, there will be a three-year transi-tional period, with the existing seriesphased out by the end of 2016. Thelargest note in the current series – the100,000 Rupiah (worth just overUS$10) is the highest denomination inAsia after Vietnam’s 500,000 Dongbanknote.

Banknote of the MonthJanuary 2013 | Vol 11 | No 1 Currency News |


Zambia Drops Zeroes, Brings Back Coins1 January, 2013 marked a fitting conclu-sion to five years of single-digit infla-tion, when the Bank of Zambia (BoZ)put into circulation a new, rebased cur-rency, with three zeros dropped fromeach denomination.

Other changes to the currencyinclude two new highest and lowestnote denominations, enhanced securityfeatures on the higher value notes, andthe transformation of the four lowestdenominations into coins - which aremaking their comeback after 20 years’of being ‘exiled’ by high inflation ratesthat rendered them worthless.

BoZ says that rebasing is necessaryfor a number of reasons: it will facilitatebusiness transactions by using smallerunits of money; it will reduce the cus-tomisation costs of standard accountingpackages usually developed in countrieswhere maximum values are in millions -and not in the billions and trillionsexperienced in Zambia; it will inspiregreater confidence, as currencies withtoo many zeros are perceived as weak;and it will reintroduce a culture of usingcoins, which are more durable thannotes. Mixing Old with New

Rebasing will not come without itschallenges though, one of which is thatold and new notes and coins with thesame face value but entirely differentexchange values will be circulatingtogether until the end of June. This isparticularly risky in the case of the K100note, which now exists in two versions:a low denomination note from the pre-vious series with a rebased value of 0.1Kwacha ($0.02) - and which has becomea coin in the new currency - and a newK100 note - the highest denominationof the rebased series - which is worthK100,000 in the previous series.

BoZ says it is already aware of plansto defraud people by taking advantageof the confusion which can arise fromusing both notes, and that the publicshould therefore familiarise itself withthe differences between them. Theseinclude the size, colour and some of thedesign elements - although the funda-

mental design is quite similar - as wellas the sophistication of security fea-tures on the new note. Examples arethe holographic LEAD® stripe cus-tomised with images specific to theZambian note, and a PEAK® pixel opti-cally-variable 3D image with intaglioembossing. They also include, on thereverse, a holographic windowed threadand an iridescent stripe.More Straightforward with OtherDenominations

With regard to denominations thatwere notes in the old series and thatstay as notes in the new, the situation isclearer. This applies to the K5, K10,K20 and K50 notes, which retain thesame design and colour as their pre-rebase counterparts, but minus theextra three zeros. A completely new K2note has also been introduced - as thelowest note denomination - bringingthe total number of notes in therebased series to six. All of the old fam-ily banknotes will have an equivalent inthe rebased currency, except the K20,which has been dropped.

The new notes have been producedby Giesecke & Devrient and the mainfeature on the front remains the Africanfish eagle - the national bird of Zambia

- which replaced former presidentKenneth Kaunda’s portrait in 1992,after he was ousted from power.

Also remaining are the national coatof arms, the ‘Chainbreaker’ FreedomStatue - a tribute to fallen heroes inZambia’s struggle for independencefrom Britain - and various trees and ani-mals that depict the country’s abundantforests and wild life.

The security features increase insophistication the higher the denomi-nation. All six notes feature the fisheagle’s head in the watermark togetherwith an electrotype of the denomina-tion and the outlined fish eagle's head,double sided intaglio, a see through fea-ture and iridescent stripe.

The K2, K5 and K10 have a demet-allised windowed thread, while all theothers have a holographic thread. TheK10 has the numeral printed on thereverse in STEP® colour shifting inkand - like the K20 - has been fortifiedwith a holographic LEAD stripe. TheK50 and K100 LEAD stripes containadditional gold tone elements, and bothnotes also have the PEAK pixel optical-ly variable image.

Continued on page 15

Banknote of the Month

Diary – Conferencesand Exhibitions

January 2013 | Vol 11 | No 1 Currency News |


World Money FairFebruary 1-3, 2013Berlin, Germanywww.worldmoneyfair.ch

10th Pan European High SecurityPrinting ConferenceFebruary 12-14, 2013 Prague, Czech Republicwww.cross-conference.com/europe

CeBIT 2013 March 5-9, 2013 Hannover, Germanywww.cebit.de

Currency ConferenceMay 12-15, 2013 Athens, Greecewww.currencyconference.com

TEMAN (Technical Meeting ofMints in ASEAN)May 26-June 1, 2013 Pattaya, Thailandwww.teman2013.com

ESTA Annual ConferenceJune 2-4, 2013 Marseilles, Francewww.esta-cash.eu

Watermark ConferenceJune 25-27, 2013St Petersburg, Russiawww.watermark-conference.com

Executive Leader WorkshopJune 16-22, 2013 Montreux, Switzerlandwww.currency-research.com

2nd Latin American High SecurityPrinting Conference July 8-10, 2013 Bogota, Colombiawww.cross-conferences.com/latinameri-ca

ICCOS AmericasSeptember 16-19, 2013 Miami, FL, USAwww.iccos.net

Future of CashSeptember 25-26, 2013 Madrid, Spainwww.efma.com

12th Asian, Middle East andAfrican High Security PrintingConferenceOctober 7-9, 2013 Bangkok, Thailandwww.cross-conferences.com/asia

The 2nd Coin ConferenceOctober 28-30, 2012 Berlin, Germanywww.thecoinconference.com

Banknote of the Month...cont

Coins Nudge Out PolymerWith rebasing has come the oppor-

tunity to reintroduce coins, four ofwhich now accompany the six newnotes. Two of these - the K1 and 50Ngwee - replace the old K1,000 andK500 notes (which were the first notesin Africa to be produced on polymer).The other two coins are the 10N and5N, which replace the old K100 andK50 paper notes.

The coins have been produced bythe South African Mint Company andeach features a bird or animal. The K1and 50N have a serrated edge, while the10N and 5N have a plain edge. The K1and 5N are nickel-plated steel, the 50Nis bronze-plated steel, and the 10N isbrass-plated steel.

Five coins remain from previousissues. Although not generally used fortransactions, they are still consideredlegal tender during the six-month tran-sition period, but are not being replacedwith rebased coins due to theirinsignificant value.Post-Transition Phase

Once the six-month transitionphase, running from 1 January 2013 to30 June 2013 is over, the old currencycan no longer be used to purchase goodsand services, but can be swapped fornew currency at BoZ, commercial banksand designated exchange centres from 1July 2013 until 30 June 2014.Thereafter, and until the end of 2015,exchange can only be done at BoZ.Public Sensitisation

In order to educate the public, BoZdeployed a ten-man team during 2012 -one for each province - to disseminateinformation through radio stations andZambia News and Information Services.In addition, BoZ ran a TV campaign andset up a web page dedicated to curren-cy rebasing.

Also, in December 2012, vendorswere allowed to start displaying bothold prices (K) and rebased prices (KR),which gave the public the opportunityto acquaint itself with rebased values.During the six-month transition phasethis dual display is mandatory.

New Glossary for MintsThe Coin Glossary is a new initiative thataims to provide a common referencepoint for the terms used in the industry.It has been compiled by Amera, withinput from a number of experts aroundthe world from ministries of finance,central banks and suppliers who workdaily with the terminology of the mint-ing industry. The 90 or so defined termseach have brief explanations, which aretranslated into English, German,French, Spanish and Russian.

According to Amera, the interna-tional coin market is dependent uponboth the knowledge and understandingof the needs of citizens, the duties ofcentral banks and governments as well

as the capabilities of the mints, blankmanufacturers, mint plant engineers,tool manufacturers, transport compa-nies and many other factors. Since thestakeholders operate in different lan-guages and cultural spheres, the CoinGlossary aims to provide pragmaticexplanations of important terms.

Amera is now inviting feedback fromthe online version in order to improve,update and add to the glossary. Later inthe year, it plans to produce a first writ-ten publication incorporating theamendments to accompany the onlineversion.

The glossary can be viewed atwww.coin-glossary.info

Publisher: Currency Publications Ltd (a ReconnaissanceInternational/Currency Research company)

Editor: Astrid Mitchell

Editorial Advisor: Richard Haycock

Contributors: David Tidmarsh, Nicola Sudan, Micaal Sidorov

Board of Advisors: Michael Boehm, Mark Crickett,Tom Ferguson, Eugenie Foster, James Hussey, BrianLang, Francis Ravez, Keith Richbell, Raul Sierra.

Currency News is published 12 times a year to reporton regulatory, commercial and technical develop-ments of importance to those specifying, issuing,producing, handl ing or process ing of currency.

Annual subscription rate - £922 / €1152/ $1567.Discounts for multiple subscriptions available -please contact us for details.

4 Windmill Business Village,Brooklands Close, Sunbury,TW16 7DY, UKTel: +44 (0) 1932 267232Fax: +44 (0) 1932 780790

PO Box 684, Parker, CO 80134,USAFax: +1 303 841 9887Email: [email protected]: www.currency-news.com

No part of this publication may be reproduced, stored in a retrievalsystem or translated in any form or by any means – electronic,mechanical, photocopying, recording or otherwise without the priorpermission of the publishers. While every effort has been made tocheck the information given in this publication, the authors, editorsand publishers cannot accept any responsibility for any loss ordamage arising out of, or caused by the useof, such information.Opinions expressed in Currency News are those of the individualauthors and not necessarily those of the publisherCOPYRIGHT 2013. ALL RIGHTS RESERVED.

CURRENCY RESEARCH LTD

Company NewsJanuary 2013 | Vol 11 | No 1 Currency News |


Charter Subscribers of Currency News

New Building … New CashManagement SystemPEC - the leading provider of cash man-agement systems - has announced that ithas been selected by the Central Bank ofAzerbaijan (CBA) to modernise its cashcentre operations. This includes an auto-mated cash centre in Baku - the capital - aswell as roll-out to all six regional centres,which operate on a more conventional,manual basis. Completion of the automat-ed cash centre is scheduled for 2015 - coin-ciding with the completion of the Bank’snew space-age administrative building - atwhich point the CMS will control all con-ventional and automated cash centres inthe country.

PEC provides the hardware and soft-ware to manage the entire cash operationcycle, including cash receipts, orders fromcommercial banks, storage, sorting,bundling, shipping and destruction. TheCMS transforms all banknotes that enterthe cycle into traceable units that aretracked through the entire process.Dedicated hardware includes automaticvault technology (storage and retrieval sys-tems, racks and security doors), along withautomated guided vehicles (AGVs), cus-tomised containers and electronic locks formaterial handling. The only ’hardware’that PEC does not provide is the cash pro-cessing machines themselves.

The management system, meanwhile,controls every physical transaction andelectronically enforces the bank security

procedures by supporting and integratingall the individual steps from cash receiptto picking/shipping or destruction. Thismanagement system works independentlyfrom other central bank systems, but canbe integrated with these for reconciliation,invoicing and clearance.

PEC will also install a common webportal to give CBA clients, operators,supervisors, management, and other stake-holders a ‘window’ into the cash centre sothat they can - for instance - view the sta-tus of an order.

PEC started life in 1984 in Leuven,Belgium as an engineering services compa-ny, undertaking complex automation proj-ects that involved mechanics, robotics,electronics and software. In 2004 it movedits expertise to cash management systems,which was to result, two years later, in afirst contract for a fully-automated vaultand logistics system with a major centralbank.

Today, the PEC Cash ManagementSystem supports a mix of manual and auto-mated processes. Azerbaijan is the latestcentral bank to adopt PEC’s system.Others include Hungary and Bulgaria.

In a separate development, the CBAis also planning to create a new banknoteexamination centre, and has announced atender to purchase and introduce the nec-essary systems and equipment.