What are the pros and cons of launching polymer banknotes? Which countries are issuing such currencies?
Various forms of currency have been tried out throughout the globe. One such initiative has focused on polymer banknotes produced from biaxially oriented polypropylene (BOPP) sheets, which enable the insertion of significantly more secure features such as metameric ink.
Pros:
- In order to use cutting-edge security measures like the “Complex Clear Window” for Singaporean dollar 2, 5, and 10 notes, central banks of developed countries like Singapore manufacture polymer banknotes using a specific polypropylene plastic.
- It is more difficult to counterfeit notes made of polymer since these notes can include additional security features like holograms and see-through windows.
- Due to their resilience, they are also more durable than paper and have several other ecologically beneficial advantages.
- Cotton is used as the primary raw material for paper currency, which results in higher water, pesticide, and chemical usage and a detrimental effect on the environment.
- In contrast, the carbon footprint of polymer banknotes is minimal.
- These notes are suitable for all climatic circumstances and are predicted to withstand a range of temperatures, which is advantageous for the typical Indian weather.
- Over 75 nations have made the changeover to polymer notes, including Canada, the United Kingdom, Scotland, Israel, the United Arab Emirates, Brazil, Singapore, and New Zealand.
Cons:
- Their production is rather pricey.
- They may be slippery and sticky, and they are difficult to fold smoothly, so when they are introduced, users should exercise caution.
Way forward:
The effectiveness of polymer banknotes in nations with varying socioeconomic situations illustrates their relative success. Adopting polymer banknotes will have various benefits for India, a rising nation with aspirations of becoming an economy worth $5 trillion.
Topics: GS-III: Indian Economy Issues Relating to Planning