Money has been made from various materials over the millennia, from leather in China during the Han Dynasty (From 202 BC to 220 AD) to shells, precious metals, cotton paper and, most recently, plastic. The materials used typically reflect the social and political climate of the era and available technologies and resources.
In Egypt, money may feel a little funny in a month or so. That’s because the Central Bank of Egypt (CBE) will start printing plastic banknotes instead of the paper currency currently in use. On Aug. 1, the CBE released several designs under consideration for the new plastic EGP 10 and EGP 20 banknotes. According to the CBE, they will launch those denominations first as they are the most widely used.
That announcement came a few days after President Abdel Fattah el-Sisi announced the new plastic banknotes would be in circulation by early November.
Egypt’s move to adopt plastic currency dates to February 2019, when CBE said it intended to produce some denominations of the Egyptian banknotes in plastic by 2020, using its new banknotes printing house in the New Administrative Capital. However, the onset of the pandemic delayed that step. The CBE is allocating four lines in its new printing house to produce those new banknotes. “Plastic banknotes will be made of polymer with a watermark for safe circulation,” the CBE said in a statement.
The transition from paper notes to plastic notes requires extremely high upfront production costs, according to the Bank of England. On the other hand, the three-dimensional structure of the polymer significantly reduces counterfeiting.
The CBE is coordinating with the Integrated Secured and Smart Documents Complex to provide advanced raw materials according to international standards for plastic polymer-made banknotes to print the notes. In April, the government inaugurated the $1 billion print house complex to issue all government documents and certificates via a unified central system.
Longer lasting, less waste
Signatory countries worldwide committed to meeting the requirements of the Paris Agreement on climate change are driving the shift to plastic currencies.
“For countries concerned about the environmental impact of their currencies, a switch to polymer notes makes sense,” according to a report by the International Monetary Fund (IMF).
That has raised some concerns that new plastic polymer banknotes are more harmful to the environment than paper.
Polymer banknotes were first produced by the Reserve Bank of Australia, Commonwealth Scientific and Industrial Research Organisation and the University of Melbourne. They came into circulation as an official banknote in Australia in 1988. New Zealand and Romania soon followed Australia’s lead.
In 2016, the Bank of England started to produce a £5 polymer note. It issued the £10 note the following year and the £20 currency in 2020. According to the bank, plastic is more durable than paper, lasting as long as five years compared to two for paper.
Kusters Engineering, a Dutch company that provides innovative and secure solutions for optimal reuse of materials, noted that polymer resists water and dirt, lasts a long time and can be recycled, and contains high-tech security features. It states polymer banknotes are made from synthetic polymer substrates (polypropylene).
A study commissioned by the Bank of England focusing on seven environmental indicators including the potential for global warming, water energy usage, and environmental toxicity, found plastic cash lasts 2.5 times longer than paper. Additionally, an analysis show polymer banknotes could last 1.33 times longer than paper notes. And when they degrade their contribution to global warming would be less.
That means that fewer polymer notes are needed to provide the same functions as paper money. As a result, less raw material is needed and, like paper notes, the polymer banknotes can be recycled into new plastic items, said the study.
Given the short lifespan of paper notes, especially in Egypt, plastic may be more economically feasible, banking expert Mohamed Abdel Aal told Al Arabiya. He also cited their effectiveness against counterfeiting. “The withdrawal of paper banknotes in Egypt will be gradual,” he said. According to Egypt’s State Information Service (SIS), the issuance of the new EGP 10 and EGP 20 polymer notes will not affect the status of paper notes, which can continue to be used.
The amount of cash printed is related to inflation and economic growth rates. The CBE prints new notes after calculating the volume of cash currently in circulation in the Egyptian economy. “The process of withdrawing worn-out banknotes from the market is carried out through the supervision of the CBE,” the SIS stated.
While Australia was the first country to produce plastic polymer currency, the BBC notes that it uses tallow, which is rendered fat from sheep, pigs, and cows, as a “slip agent” to prevent friction and static charges.
The Reserve Bank of Australia confirmed that its banknotes contain a tiny amount, around 1%, of the animal byproduct. The announcement stirred controversy among animal rights advocates worldwide. An online video posted to Facebook by social commentators Project Nightfall revealed that not only is tallow used in the British five-pound note and Australian currency, but in 22 countries including Canada, Malaysia, and Singapore.
Some social media users were horrified. “That is really horrible to hear. But we can all limit cruelty of animals in our daily life by going vegan and using cruelty-free products. It’s so easy.”
Others had a different point of view. “Isn’t it better to just use natural animal parts rather than creating synthetic versions? We are part of this giant ecosystem, if we don’t eat animals, someone else/some other animals do.”
Tallow is used in a number of household items including soap, candles, plastic bags, moisturizers, and fabric softeners. It’s also found in some aviation fuel and mobile phones. Animal byproducts also are used in clothing and cosmetics.
Yet there has been no suggestion that countries with plastic banknotes intend to revise their currency production strategy. In 2017, despite heated protests by animal activists and vegans, the Bank of England decided to stick to plastic banknotes that used animal fat, according to The Guardian.
For Egypt, mass adopting plastic notes could increase its import bill, as the country is already a new importer of such animal-based products.
As green as you think?
When the Bank of England introduced the new plastic notes, the government promised they would not only be more durable and secure but also better for the environment because they are more easily recyclable. However, with concerns growing over the ecological impact of plastic, many wondered whether mass-produced polymer is really better than paper.
One study has put those claims in doubt. A side-by-side comparison of polymer versus paper banknotes by Evergreen Finance London, a financing corporation, using data from the Bank of England and cash manufacturing and use from the British Retail Consortium, found that polymer £5 notes “release 8.77 kilograms of C02, almost three times more than paper notes.”
The Evergreen Finance findings differ from the Bank of England. The latter claims the discrepancy is due to the bank’s data being based on what it calls “functional units” — the circulation of 1,000 banknotes over 10 years — rather than the actual number of notes used by an individual, their manufacture and the number of exchanges they go through. “It’s almost impossible to calculate how many banknotes an individual will use over a set period of time and what the associated emissions of manufacturing this amount are,” according to the report.
The report looks at other forms of electronic payment, such as Apple Pay, and finds the most environmentally friendly means of payment is a credit card. Over its three-year life, a standard card produces just 20.8 grams of carbon dioxide (CO2) production. The emissions from wireless payments add 40 grams of CO2.
Other disadvantages associated with polymer banknotes are that they are difficult to fold, says Sara Sherif, a 30-year-old Australian-Egyptian residing in Cairo. “There’s this crease along the fold line when force-folded. It can look a little ugly and reminds me of Monopoly money. They also can get very sticky when wet, which can be uncomfortable to hold, count and transfer. That’s usually a problem for sorting machines in banks.”
What about COVID-19?
One of the biggest differentiators between paper and polymer banknotes is how easily the virus can attach to the surface, according to De La Rue, a British manufacturer of polymer and security printed products including banknotes
Payment mechanisms are divided into those that are porous, like paper banknotes, or non-porous, like polymer banknotes, debit cards, credit cards, pin pads and mobile phones, according to the company.
Microbiologists from the University of Arizona and Michigan State University measured the “transfer efficiency” of various bacteria and viruses and found it was lower for porous surfaces. This means that viruses and bacteria can be transferred from and wiped clean from less-porous surfaces more easily.
“Polymer banknotes have been found to harbor less bacteria than paper banknotes, possibly because of the ease with which they can be wiped clean,” according to De La Rue. The report added that changing from paper to polymer banknotes, or vice versa, is unlikely to have any significant impact on the spread of COVID-19.