Where Does Your Cash Come From?
WHY YOU SHOULD CARE
Because you might be used to your clothes, food and gear coming from foreign countries, but you probably didn’t know that the money you use to pay for them might also be imported.
By Laura Secorun Palet
Money is the lifeblood of a country’s economy. But states sometimes need transfusions, and a surprising number of them choose to get their currency printed abroad.
According to the World Bank, of the world’s 171 currency-issuing authorities, roughly 50 percent choose to outsource the production of some portion of their money. The Reserve Bank of Australia alone prints notes for around 20 countries, including Bangladesh, Mexico, Nepal, Chile, Romania and Vietnam.
This is because Australia was the first country in the world to implement the polymer notes. These plastic bills are increasingly popular because they offer several advantages over conventional paper notes, including greater security against counterfeiting and four times the pocket-life.
50: Percentage of national currency-issuing authorities that outsource some portion of their currency printing
10-20: Percentage of world’s cash printed by private companies
6.3: Billion notes printed in 2012-13 by the leading private printer, De La Rue
The outsourcing business can be quite counterintuitive and applies to more than paper money. For example, the U.K.’s reticence to enter the Eurozone does not stop the Royal Mint from occasionally helping to produce euro coins.
This practice could potentially put the economic sovereignty of countries at risk, yet most citizens do not know about it. Even India, which had a political debate about the issue back in 2010, decided to carry on with the practice.
Governments are not the only ones involved in the currency-outsourcing business. Between 10 to 20 percent of the world’s cash is printed by private companies. The Canadian Bank Note Company, established in 1987, takes orders from 20 countries while the German firm Giesecke & Devrient has worked for 60 countries.
Crane Currency, a printing firm based in Sweden and Massachusetts, is the second biggest company in the sector, but the world’s largest commercial banknote printer is De La Rue, based in the U.K. Established in 1813, the company has been contracted to produce 150 different national currencies. Why? “We usually print money for states that do not have the infrastructure to do so or when their needs surpass their capability,” explains Rob Hutchison, De La Rue’s communications director.
In 2012-13, De La Rue printed 6.3 billion notes, including a new family of banknotes for Barbados and Fiji. But over the years, the company has handled more politically contentious situations. In 2003, after the fall of Saddam Hussein, the company took over the production of the new Iraqi dinar, financed by the government of the United States.
Also controversial, the firm continued to print money for Colonel Gaddafi in Libya while Prime Minister David Cameron was trying to isolate the regime in 2011. In fact, the British government impounded nearly $1.5 billion worth of Libyan dinars, which had been produced by De La Rue.
Outsourcing could potentially put the economic sovereignty of countries at risk, yet most citizens do not know about it.
When asked about other Middle Eastern clients, like Iraq, Hutchison says, “We still print notes for Libya, but I am not allowed to discuss more about certain countries.”
In addition to keeping their client lists under lock and key, money-producing companies never share how they transport billions in cash from their warehouses to central banks abroad. Nor will they say how much they charge for printing a bill. And so, for the most part, currency outsourcing remains a mystery. A very lucrative one.
- Laura Secorun Palet, Laura is a foreign correspondent obsessed with borders and everything that crosses them. Born in Barcelona, based in Nairobi, she writes about national identity, migration and trafficking of all kinds. She considers herself a professional eavesdropper. Which is ironic because she is known to speak loudly. Follow Laura Secorun Palet on Twitter Follow Laura Secorun Palet on FacebookContact Laura Secorun Palet