BoC next generation of bank notes

News: Welcome to the Canadian Paper Money Forum.

The next generation of bank notes, planned for introduction beginning in 2011.

Bank notes are the most tangible part of a central bank's work. Everyone uses paper money. I should point out something that might surprise some of you here in the "Technology Triangle"—despite the many alternatives to cash, the demand for cash continues to grow, roughly in line with nominal GDP growth.

The main objective of our bank note work is to provide Canadians with paper money that can be trusted—money we can use with (here's that word again) confidence. Of course, bank notes should also be beautiful, durable, and easy to handle, but if they can't be used with confidence, either because of high inflation or because of widespread counterfeiting, they lose much of their value.

What's our strategy for achieving this objective? Well, as I said earlier, the Bank is committed to keeping inflation low and predictable, and we have a pretty good track record on that front. To deter counterfeiting, we do three key things. First, we take a great deal of care in designing bank notes. As I speak, my colleagues at the Bank are hard at work designing the next generation of bank notes, planned for introduction beginning in 2011. A significant part of the design effort goes into making the notes secure against counterfeiting. Second, we conduct broad-ranging education efforts to help the public, retailers, and law-enforcement officers to authenticate genuine bank notes and detect counterfeit ones. In fact, if any of you would like some help in this regard, I invite you to go to our website and click on "Bank Notes," where you'll find some useful training material. Third, we promote vigorous law enforcement. We work closely with police forces and the Crown, and provide them with information and training that can help in the prosecution of counterfeiters. In 2004, the Bank launched an annual Law Enforcement Award of Excellence for Counterfeit Deterrence.

How well have we done in pursuing our bank note objective? I think a reasonable assessment would be "fairly well." Canadians do have confidence in their money. They use bank notes for day-to-day transactions without worrying unduly about counterfeiting.

Can we do better? We think we can. In addition to examining whether refinements to the monetary policy target would be worth pursuing, as I mentioned earlier, we believe that we can further reduce the incidence of counterfeiting. Specifically, by 2009, we aim to reduce the level of counterfeiting to fewer than 100 counterfeits detected annually per million notes in circulation, down from about 225 per million last year, and 470 two years ago. We also have plans to work with the RCMP to build a database of counterfeiting information. Finally, we intend to improve our bank note distribution system, and to monitor the use of alternative means of payment.
I'll conclude my remarks now.

http://www.bankofcanada.ca/en/speeches/2007/sp07-3.html

That is FANTASTIC News!  

Something to look forward to!

I also heard we might be seeing a signature change very soon as well.... Anyone read or heard anything about it?

Finally, we intend to improve our bank note distribution system,

Hopefully they will make it easier for Brick Searchers to get Bricks!!!    8-)

I would like to submit buxvet's design for the new $5.

http://www.cdnpapermoney.com/forum/index.php?topic=4078.0

Buxvet's Sir Wilfred Rastaman,
It's about time we recognize reggae as a true musical art form and rewrite our national anthem in that style.  

PD the Bass guitar player "Yah mon!"

 

I Sure Harper would LOVE that!!!  

Bank of Canada Currency

Responsibility
The Bank issues Canada’s bank notes. It is responsible for the design
(including security features), production, and distribution of new notes,
as well as for the replacement of those that are old or worn. The Bank
is also engaged in counterfeit deterrence through bank-note-related
education, communication, and compliance.

Trends and Challenges
The demand for bank notes is expected to continue to grow, even though
alternatives to cash are becoming more popular.
Advancing technology is improving the quality of reprographic equipment,
adding to Canada’s current anti-counterfeiting challenges.
Public awareness of how security features work is low, and few retailers
routinely authenticate bank notes.

Desired Outcome
Canadians use bank notes with confidence.

Strategy to Achieve Desired Outcome
*Reduce counterfeiting below a clearly defined threshold

Outcome Goal
*Reduce the counterfeiting level to fewer than 100 detected counterfeits
for each million genuine notes in circulation, by 2009

Priorities
*Develop a significantly more secure next generation of bank notes,
which the Bank will begin issuing in 2011
*Increase verification of notes by retailers
*Fully engage prosecutors, law-enforcement officers, and other participants
in the judicial system to improve counterfeit deterrence
*Replace notes from older series, and improve the efficiency and effectiveness
of note operations

Performance Measures
*The number of detected counterfeit notes per year for each million
genuine notes in circulation (parts per million)
*Our readiness to start production of the next generation of bank notes,
with significantly enhanced new security features, beginning in 2010

Business-Line Activities
1) Research and Development
OBJECTIVE
Establish a comprehensive and ongoing research and development
program that will enable the Bank to begin issuing new bank notes
by 2011 that are not only significantly more secure from counterfeiting
threats, but that are also easier to authenticate than the current series

Currency and New Technologies

Policy issue:

The Currency research program reflects the fact that new technologies are both challenges and opportunities for bank notes. The Bank's counterfeit analysis program monitors the challenge of technologies and materials which counterfeiters may use. At the same time, the Bank will evaluate or facilitate the development of technologies which provide opportunities to strengthen the security of our notes. During 2007, the primary focus will be on the continuation of a multi-year research program leading to a new generation of bank notes planned for issue starting in 2011. Bank technical staff and the RCMP will continue to assess existing and emerging technologies available to counterfeiters of bank notes. Scientific research and development will contribute to the selection of future bank note materials and security features. Finally, policy and strategic research is required to address a number of issues that will arise as planning for the development of the next generation of bank notes begins.

There are also opportunities to improve the performance of notes in circulation. A program to measure the condition of circulating notes will continue in 2007; as well, new technologies to increase the durability of notes will be assessed through laboratory and circulation tests. A review of the Bank Note Distribution System and research with retailers will also assess the approaches and incentives required to motivate an appropriate level of checking bank notes in circulation for authenticity.

Fundamental research will add to our understanding of the factors that influence confidence, which is a key ingredient in the Bank's "commitment to Canadians" about currency, and counterfeiting, which is the manifestation of a problem in a currency system, in order to decide which measures most effectively promote the one and prevent the other. Looking to the longer term prospects for bank notes as a retail means of payment, further theoretical and empirical research is needed to understand who uses bank notes, how they are used, and what is the future of bank notes compared to other means of payment - how they can play the most productive role possible within Canadian society.

The Bank has a strong reputation for collaborative research. Research and development will continue to be done with others when this approach improves the potential for success. Organizations in Canada and internationally are being engaged in projects that we believe will deal with existing and emerging threats and opportunities.

Research questions:

Q1: What security features, material, and technologies should be adapted or developed for possible inclusion in the next generation of bank notes?

Q2: What factors influence the quality and authenticity of circulating bank notes?

Q3: What factors influence confidence and counterfeiting?

Q4: Why are Canadians using payment instruments the way they do, and what is the likely evolution of bank notes relative to other payment instruments?

http://www.bankofcanada.ca/en/fellowship/highlights_res_07.html#6

Given today's news, I wonder if the BoC will have to re-work their currency plan should a $5 coin become reality.  I really hope not.  Actually I'm quite bothered this $5 coin stuff is back on the table.

The loonie, the toonie and soon the quintie?

Jack Branswell, CanWest News Service
Published: Monday, November 05, 2007

OTTAWA, ONTARIO -- It took Canadians a while to get used to having loonies and toonies weighing down pockets and purses, but now they might have to get used to a $5 coin in the not-too-distant future.

In documents obtained by CanWest News Service, the federal government has studied the introduction of a new $5 coin to replace the bill. The Bank of Canada prepared an "optimal denomination structure" report in 2005 and, as part of it, used two theoretical financial models to analyze our coin and bank note system.

One model, called the D-metric, concluded that the elimination of the penny was warranted and recommended the
introduction of a $5 coin and a $200 bill some time between 2005 and 2021. Another model, called Boeschoten, concluded that a $5 coin would be needed between 2009 and 2020, "given the price level and other factors would be consistent with the historical shift from notes to coins at other denominations."

We aren't far off [a $5 coin]," François Dupuis, vice-president and chief economist for economic studies with the Desjardins banking group, said in a recent interview. "Maybe in three to eight years. We will be talking a lot about this in the coming years, but I don't think we are there just yet."

Dupuis, who co-authored a report calling for the penny's elimination, said the federal government needs a strategy
because the country can't have too many coins.

"I think the public will disagree [with a $5 coin] because they will see it as having too many coins and it will get blocked there. But the logic [for a $5 coin] is good."

NDP finance critic Tom Mulcair agreed. "The real question is going to become: Are people willing to carry around that much change, worth that much? But I think somewhere in the next four to five years, in that horizon, we'll probably see the appearance of a $5 coin."

The decision to change any part of the country's currency rests with the Department of Finance, which would consult the Bank of Canada and the Royal Canadian Mint.

The Department of Finance's position is that it has no plans to introduce a $5 coin. "There isn't an indication at this time that one is needed," said Chisholm Pothier, press secretary to Finance Minister Jim Flaherty.


© Times Colonist (Victoria) 2007

http://www.canada.com/victoriatimescolonist/news/story.html?id=d586286f-8048-4afa-97bc-4298d8f7dc41&k=61257

now they might have to get used to a $5 coin in the not-too-distant future.

OMG, if there are no more $5 notes; how can I possibly make ends meet when I can't brick search   No university for the kids

November 6th, 2007


Mr. Surette,


       The Bank of Canada is responsible for the design, production and distribution of Canada's paper money. Responsibility for coinage rests with the Royal Canadian Mint. Introducing or removing denominations of coins and bank notes falls under the authority of the Government of Canada. Any decision to change the current coin/note boundary would be made by the Government, in consultation with the Royal Canadian Mint and the Bank of Canada.  There are currently no plan to eliminate the $5 bank note for a $5 coin.

        I hope this information is helpful and thank you for your interest in our Canadian currency.

 
Sincerely,
 
Secure paper money: It's in your hands!
Joanne Smith | Bank of Canada

Given today's news, I wonder if the BoC will have to re-work their currency plan should a $5 coin become reality.  I really hope not.  Actually I'm quite bothered this $5 coin stuff is back on the table.

It's the proposal that just won't go away.  Proposal is made, Canadians soundly reject the idea, proposal is scrapped.  A year or two later, the cycle begins again.  I wonder how many times we will run around in this circle before a permanent decision is made on the matter.

Let's instead talk seriously about eliminating the cent coin.  Now THERE'S a subject into which I can sink my teeth.