Paper or plastic? This is the question buzzing around the UK, but the Bank of England is gauging the public opinion about banknotes and not grocery bags.
For the last three years, central bank of England has been conducting research on the benefits of replacing paper banknotes with plastic. According to The Telegraph, the bank has commenced a two-month public consultation that aims to find out what consumers think about introducing plastic notes.
The prospect of plastic banknotes is not a new discussion, however the idea has regained attention since Mark Carney became the new governor. Carney previously served as head of Canada’s central bank, where he was forced to switch to polymer bank notes during his time there.
“From our research, we are confident that printing on polymer would bring considerable benefits to both the durability and quality of banknotes, while also enhancing the strong security which the public associates with Bank of England banknotes,” the bank said in a statement to Finextra.
Bank officials reveal that plastic notes have several relative merits: They are more secure, they are cleaner and they last longer. Research shows that polymer banks are more durable not only because they are waterproof, but also because they can be used for two-and-a-half years longer than the average paper note. According to the bank, the average a paper five note will last about six months, compared to a plastic note that can last for up to two years.
The Telegraph reports that polymer notes costs more to produce and they are less environmentally friendly than paper. However, since plastic notes last longer, this means major cuts in production. The notes’ durability actually makes them cheaper and friendlier overtime.
Yet, downfalls exist with every new project, and polymer banknotes are no exception. The bank reported that plastic banknotes can be inconvenient because they spring back once they are folded. Many researchers have admitted they are concerned about the notes being overly “slippery.” The bank also warned that the notes “begin to shrink and melt at temperatures above 120°, so they can be damaged by ironing for example.”
Finextra reported that the bank is currently running a series of public roadshows across the UK to collect consumer feedback.
Deputy Governor of the Bank of England, Charles Bean, said: “The Bank of England would print notes on polymer only if we were persuaded that the public would continue to have confidence in, and be comfortable with, our notes.”
The final decision is expected by the end of December of this year, after the public consultation comes to a close. Banks and other key stakeholders have already been consulted and are on board with the project. If the decision for plastic notes is positive, then the bank revealed smaller banknotes will be introduced—starting with a new fiver and tenner. Polymer banknotes will be launched one denomination at a time. If the initiative gets a thumbs-up, Winston Churchill’s fiver will be first on the list and will be done as early as 2016.