Charles Bean: Polymer banknotes Remarks by Mr Charles Bean, Deputy Governor for Monetary Policy of the Bank of England, at the Bank of England, London, 10 September 2013. *  *  *  Good morning and welcome. One of the Bank’s most visible responsibilities is the issuance of banknotes. It is a long-standing responsibility that dates back to shortly after our founding in 1694 and over the past three centuries, our objective has remained the same, namely to supply good-quality, genuine banknotes that command the people’s trust. Meeting that objective helps us to achieve one of our core purposes, which is to maintain confidence in the currency. Following a three-year research programme, we are today announcing the launch of a public consultation regarding the possible introduction of polymer as the basis for the next generation of banknotes. Polymer banknotes are made from a durable, yet thin and flexible plastic film. Design features of the banknote are printed on the film, meaning these notes can look very similar to notes printed on paper. If the public reception to the proposal is supportive, then the recently announced Sir Winston Churchill £ and Jane Austen £ notes would be issued on polymer. This change would happen in 2016 and 2017 at the earliest. The Bank’s research programme has been wide ranging, investigating the impact of the introduction of polymer notes along several dimensions, including: security, durability, costeffectiveness, the impact on stakeholders in the cash industry, environmental considerations, and the likely impact on noteholders.

In undertaking the research, we have worked closely with external stakeholders from the cash industry and have already engaged with the public through several independently-managed focus groups. And we have consulted other countries that have undertaken research into different banknote materials, of which several have already switched to the use of polymer, including Australia and Canada. Based on this research, we are confident that printing our banknotes on polymer would bring several benefits: First, polymer notes are more secure. Polymer notes are harder to counterfeit and allow for the inclusion of “windows” or clear portions in the design, which considerably enhances counterfeit resilience. Such features also allow users to check whether notes are genuine quickly and easily. Second, polymer notes are more durable and resistant to damage. As a result, polymer banknotes last at least two-and-a-half times longer than notes printed on paper. And because polymer banknotes last longer, they don’t need to be replaced so frequently, meaning they are cheaper to produce. Third, polymer banknotes repel dirt and moisture better than paper banknotes, and so stay cleaner for longer, reducing the incidence of ‘tatty’ notes. Finally, polymer banknotes are more environmentally friendly than paper notes. Given these benefits, we are confident that a switch to printing notes on polymer makes sense. But we also recognise that the public takes pride in their banknotes, and that changes to the design and format of notes are consequently of great interest. Because of this, we have decided to consult with the public before making any final decisions.