In an attempt to revive the life of the £5 banknote, British banks will soon make the notes available in automated teller machines (ATMs).

The Bank of England says the £5 was beginning to fall out of circulation because many people now consider the denomination to be “small change.” As a result, a bank source told UK’s The Daily Mail this week, the five pound notes end up “being stuffed into people’s back pockets, rather than returned to banks in the form of deposits” and therefore not a likely candidate for ATMs.

Last year, in conjunction with HSBC, the Bank of England launched a pilot project asking street lenders to stock more of the notes and are beefing up the project this summer with their focus on ATMs.

According to the Daily Mail, “In the early 1990s, just 25 per cent of cash was withdrawn using hole-in-the-wall machines, but their use has exploded and ATMs now dispense around 70 per cent of all cash in circulation. But as banks prefer to dispense larger denomination notes from their cashpoints, the fiver has suffered in comparison.”

This isn’t the first time England has sought more lower denomination bills to be introduced into circulation. As we wrote back in November, British business leaders urged the Bank of England to increase the number of £10 claiming that “those who frequently use cash dispensers who don’t want ‘to carry higher-value denominations, especially £20 notes, around in their purses and wallets.’”

These same business leaders said that “despite credit and debit cards, small-ticket items are [still their] lifeblood,” highlighting a continual need for banknotes not only in England, but the world over.

SOURCES:
The Daily Mail: “£5 Notes To Be Available From Cash Machines”
The Daily Mail: “Give Us More Tenners, The Bank of England is Urged”
Global Paper Security: “British Business Leaders Demand More Ten Pound Banknotes”

Debit cards have placed banks, like this one in Tashkent, between the people and their money. Courtesy Radio Free Europe Radio Liberty.

A move to reduce the amount of banknotes used in everyday transactions in Uzbekistan has hit some rather large setbacks, at times leaving people with no cash in hand at all.

The central-Asian country recently launched a campaign to push the use of debit cards as a more convenient way of conducting transactions, with the government saying the move would help bring everyday transactions into the digital age.

Under the program – which is only a month old – citizens were to be paid via electronic deposits, and encouraged to use debit cards for transactions for any/all methods of payment. The program would also allow citizens to conduct traditional bank transactions like withdrawals should they need to.

But some citizens say getting their hands on cold hard cash isn’t easy at all and are feeling the pangs of the banknote experiment.

“When we go to banks, they won’t give us any money because they say they don’t have cash,” says Gulbahor, a teacher from the eastern town of Syrdarya “And many shops don’t accept cards and tell us, ‘We trade only with cash.’”

This Catch 22 – not having access to banknotes, but having to use only banknotes in some markets – is causing a major problem for Uzbek middle-class citizens.

Debit cards were introduced in Uzbekistan in the 1990s, and were mainly adopted by the wealthy classes. Recently, Uzbek authorities have promoted the cards by ordering supermarkets, restaurants, hotels and gas stations to install electronic terminals. The terminals, however, are absent from bazaars and markets where most citizens would conduct their daily business.

Gulbahor says that the only way she can get her hands on banknotes is through money-changers who have equipped themselves with debit-card terminals, but the cost of such a transaction is high.

The belief that banknotes are a thing of the past is a common misconception. Though consumers are moving forward into a more digital age, the demand for banknotes worldwide is actually increasing (read: Worldwide Banknote Demand Is Increasing)

Last year, for example, British business leaders, urged the Bank of England to producer more ten pound banknotes (read: British Business Leaders Demand More Ten Pound Banknotes).

A recent report by Research and Markets, the world’s largest market research resource, also highlighted the continual demand for paper banknotes around the globe.

SOURCES:
Radio Free Europe, Radio Liberty: “Debit Cards Costly, At Least For Some Uzbeks”
Research and Markets: “Worldwide Banknote Industry Research Report”

The world's largest banknote: a 1998 100,000 peso note roughly the size of a sheet of legal paper

With the US Mint launching the release of a new $1.00 coin in November, Time Magazine drafted this list of top-ten tidbits about money that may surprise you:

#1 – The Largest Banknote: Measuring in at roughly the size of a sheet of legal paper, the world’s largest single banknote is the 100,000-peso note created by the government of the Philippines in 1998. Designed to celebrate a century of independence from Spanish rule, the note was offered only to collectors, who could purchase one of the limited-edition notes for 180,000 pesos, or about $3,700.

#2 – One In A Million: The largest banknote ever issued by the Bank of England was the £1,000,000 note, issued in 1948 as a temporary measure during the postwar reconstruction in the Marshall Plan. Designed for use by the U.S. government only, the notes were canceled after just a few months, allowing very few to escape into private hands. But just because the notes are out of service doesn’t mean they’re valueless — in 2008, one of two known surviving notes fetched almost $120,000 at auction.

#3 – The World’s First ATM: It might just be the best idea to come to a man in the bathtub since Archimedes’ time. While taking a soak, inventor John Shepherd-Barron devised what is hailed as the world’s first automatic teller machine, although his claim to the title is a matter of dispute. He pitched the device to the British bank Barclays. It accepted immediately, and the first model was built and installed in London in 1967. Though the machine used PIN (personal identification number) codes, a concept Shepherd-Barron also claims to have invented, it was dependent on checks impregnated with the (slightly) radioactive isotope carbon 14 to initiate a withdrawal, as the magnetic coding for ATM cards had not yet been developed. One other difference from its ubiquitous modern counterpart: it didn’t charge a fee.

#4 – The Origins of $:No one knows the origin of the dollar sign, but the U.S. Bureau of Engraving and Printing has a pretty good guess. The government agency responsible for designing and printing all those crisp dollar bills says the design, originally used to denote Spanish and Mexican pesos, “P S ,” came to be written such that the S was on top of the the P. The symbol was widely used before the 1875 issue of the first U.S. paper dollar. And in case you never noticed, it doesn’t actually appear on U.S. currency at all.

#5 – You Can’t Take It With You: All bills eventually wear out. The smaller the value, the more often you use it — and the shorter its lifespan. A $1 bill lasts a measly 21 months, while a Ben Franklin can last more than seven years. Over that time, of course, owing to inflation, its value will decline — which is the perfect excuse to spend it quickly.

#6 – America’s Counterfeit Cops: Following the Civil War, counterfeit currency became such a rampant problem in the U.S. — more than a third of all bills were believed to be fakes — that the government was forced to act. In 1865, a special division of the Treasury Department was created to crack down on counterfeiting before it completely undermined the nation’s economic system. That agency still fights bogus money today, but it’s better known for its dark-suited agents and intimidating SUVs — it’s the United States Secret Service, which also protects the President and other top political leaders. President Abraham Lincoln authorized the Secret Service on April 14, 1865 (ironically, the day he was assassinated at Ford’s Theater); its mission expanded to full-time presidential protection following the assassination of President William McKinley in 1901. The 6,500-person agency was moved to the newly established Department of Homeland Security in 2002.

#7 – It’s All About The Elizabeths: From Australia to Trinidad and Tobago, Queen Elizabeth II’s portrait has graced the currencies of 33 different countries — more than that of any other individual. Canada was the first to use the British monarch’s image, in 1935, when it printed the 9-year-old Princess on its $20 notes. Over the years, 26 different portraits of Elizabeth have been used in the U.K. and its current and former colonies, dominions and territories — most of which were commissioned with the direct purpose of putting them on banknotes. However, some countries, such as Rhodesia (now Zimbabwe), Malta and Fiji, used already existing portraits. The Queen is frequently shown in formal crown-and-scepter attire, although Canada and Australia prefer to depict her in a plain dress and pearls. And while many countries update their currencies to reflect the Queen’s advancing age, others enjoy keeping her young. When Belize redesigned its currency in 1980, it selected a portrait that was already 20 years old.

#8 – Dirty Money:All money, it turns out, could stand to be laundered: the stuff is filthy. Studies show that a solid majority of U.S. bills are contaminated by cocaine. Drug traffickers often use coke-sullied hands to move cash, and many users roll bills into sniffing straws; the brushes and rollers in ATMs may distribute the nose candy through the rest of the money supply. (See the top 10 athlete drug busts.)

Also found on bills: fecal matter. A 2002 report in the Southern Medical Journal showed found pathogens — including staphylococcus — on 94% of dollar bills tested. Paper money can reportedly carry more germs than a household toilet. And bills are a hospitable environment for gross microbes: viruses and bacteria can live on most surfaces for about 48 hours, but paper money can reportedly transport a live flu virus for up to 17 days. It’s enough to make you switch to credit.

#9 – Inflation Nation:To deal with hyperinflation that reached the ludicrous level of 231 million % and saw the price for a loaf of bread hit 300 billion Zimbabwean dollars, Zimbabwe’s newly formed unity government — including bitter opponents President Robert Mugabe and Prime Minister Morgan Tsvangirai — issued a $100 trillion note in early January. (One hundred trillion, by the way, is a 1 with 14 zeroes — making the note the highest denomination in the world.)

Just weeks later, however, the leaders decided to back-burner the hugely devalued Zimbabwean dollar and began allowing people to do business in other currencies. The move managed to curb inflation for several months until a small uptick in July. One hopes some of those $100 trillion notes didn’t get spent all in one place.

#10 – The First Paper Money: Paper bills were first used by the Chinese, who started carrying folding money during the Tang Dynasty (A.D. 618-907) — mostly in the form of privately issued bills of credit or exchange notes — and used it for more than 500 years before the practice began to catch on in Europe in the 17th century. While it took another century or two for paper money to spread to the rest of the world, China was already going through a fairly advanced financial crisis: the production of paper notes had grown until their value plummeted, prompting inflation to soar. As a result, China eliminated paper money entirely in 1455 and wouldn’t adopt it again for several hundred years. Another not-so-well-known fact: the word cash was originally used to describe the type of round bronze coins with square holes commonly used in the Tang Dynasty, called kai-yuans.

SOURCE:
Time Magazine: Top 10 Things You Didn’t Know About Money

In a prime example of how the demand for banknotes is rising even in a plastic and digital age (see also: Combating Counterfeiting: A Brief History of Security Features ), the Daily Mail reported this week that British business leaders have urged the Bank of England to increase the number of £10 notes in circulation.

The UK paper reports that the outcry for the demand of ten pound notes is coming mainly from small shops where “despite credit and debit cards, small-ticket items are [still their] lifeblood,” and from those who frequently use cash dispensers who don’t want “to carry higher-value denominations, especially £20 notes, around in their purses and wallets.”

In the UK, like in Canada, automated teller machines (ATMs) often only distribute higher denominations like twenty pound/dollar notes “because banks can cut costs if they don’t have to refill them so often.” A whopping 70 per cent of banknotes in circulation in England are withdrawn from ATMs.
The Bank of England, however, has said there is no shortage of any notes in any denomination.

SOURCE: Give us more tenners, the Bank of England is urged

Read more: http://www.dailymail.co.uk/news/article-1227874/Give-tenners-Bank-England-urged.html#ixzz0X43bK3C1

Posted By: T. Murphy