Central Bank Best Practices: Banknote Destruction, Disposal, and Recycling

 

Contrary to suggestions that the demise of cash is imminent and notwithstanding the increasingly stringent limits imposed on its use worldwide, cash continues to grow and remains in intensive use around the globe – to such an extent that most economies define themselves as high to very high in cash intensity. As a result, large quantities of unfit banknotes accumulate and are destroyed. In response to inquiries from Central Banks, Currency Research has performed a study on best practices in the handling and processing of banknote waste. A questionnaire was distributed to one hundred and ten Central Banks. The responses given by fifty-one banks were analyzed, and follow-up discussions with banks and suppliers of banknote products and services were conducted. The resulting report - Central Bank Best Practices: Banknote Destruction, Disposal, and Recycling - stresses innovations and efficiencies in banknote destruction and possibilities for disposal, with emphasis on environmental friendliness, i.e., “going green.”

In particular, incineration and recycling - in the broad sense of these terms - of both paper and polymer banknotes respectively are strongly recommended. Landfill disposal is strongly discouraged. Several suppliers have developed and offered solutions that may facilitate the transition to more environmentally friendly practices. Some Governments and Central Banks have adopted best practices. Other Central Banks have encountered problems in doing so and do not have recycling programs in place. These banks and other entities in the same situation are encouraged to embrace the recommendations in the manner best suited to the needs of their particular environments.

Industry suppliers are actively seeking solutions to banknote recycling issues. Central Banks are encouraged to communicate with them to learn more about the new technologies that can help to develop recycling programs of their own.