Last September, the Liberian government announced it had lost 4 million. It was not due to any poor investment decisions, or some accounting fraud, but money – cash – that actually went missing.
The banknotes were ordered by Liberia’s central bank from overseas printing plants and disappeared after passing through the country’s main ports and airports.
Meanwhile, just before a month, Indians expressed outrage on social media about money printing. An article published in the South China Morning Post claimed the state-owned China Mint and Printing Corporation had won the contract to print Indian rupees, raising national security concerns.
The Indian government has denied this, saying the information in the article is “baseless” – it actually prints all the currencies from four high-security presses in the country.
Both of these cases raise the question of whether we should care where money is printed?
De La Ru, a British money printing company, introduces a polymer 5 pound coin
Some countries, like India, produce all cash at home. For example, the United States is legally obligated to print banknotes in its territory.
But for some countries, it is common to print money abroad , as Liberia doesn’t even have its own mint.
There are a number of highly specialized companies that print cash for most of the world’s currencies. Banknote producer De La Rue (UK) estimates that the commercial money printing market accounts for 11% of all banknotes produced.
The largest producers of banknotes are mainly in Europe and North America.
The British company De La Rue is the largest producer of banknotes in the world. It generates cash for about 140 central banks. Each week, it produces enough bills that, if stacked, would be twice as tall as Mount Everest.
De La Ru’s competitor, the German company Giesecke & Devrient, produces banknotes for about 100 central banks, while the Canada, US Banknotes and Sweden-based Crane are also among the major players. big money printer. But note that while it’s big business, it’s also very secretive. All declined to disclose exactly which central bank hired them to produce the money. Many governments don’t want to talk about this either.
Basically, printing money is very expensive and difficult to do.
Companies involved in printing money have been around for several hundred years. They have technology expertise and a strong reputation for security.
De La Ru began producing banknotes in 1860, first for Mauritius and then elsewhere. This company produces new British polymer banknotes.
For smaller countries, outsourcing money production can make a lot of sense. For instance, it may not be worth buying an expensive laminator if they only need a small amount of foil. Printing money also requires keeping up with rapid technological advances to prevent counterfeiting.
A banknote printer produces about 1 to 1.4 billion bills per year. So if a central bank produces less than that, it doesn’t really have financial value. The United States prints about seven billion bills each year.
The tiny Pacific nation of Solomon Islands, with a population of 600,000, uses a coin designed and printed by De La Ru. Other publicly available information suggests that Macedonia and Botswana also outsourced the British company.
Many concerns in India are related to national security issues , especially as the country has a border dispute with China.
But are concerns about money outsourcing well-founded?
A prominent example is 2011 Libya. The British government withheld about 1.86 billion dinars (£929 million), of which about 140 million pounds were printed by De La Ru, causing a shortage of banknotes in Libya during Colonel Muammar Gaddafi’s last moments in power.
So, in some cases, foreign governments can withhold cash, but that’s rare. The incident in Libya shocked industry experts but had little effect on outsourcing the production of banknotes.
Theoretically, a country could be ruined by money outsourcing if the manufacturer prints more than is required without the permission of the central bank, injecting too much cash into the economy. to undesirable effects on the economy, such as inflation.
There is also the risk that money printed abroad will make it possible for outsiders with knowledge of a particular note’s security features to create fraudulent bills.
However, there is no clear evidence that either of these examples is taking place.
On the other hand, since most currencies are still printed by the countries themselves, the threat is probably not that great. “The majority of countries print their own banknotes, and a small number are printed in a commercial industrial way,” said Guillaume Lepecq, director of the International Monetary Association.
There is no international body to regulate money production.
A lot of people are using cash less often. Mobile apps and contactless payment methods have made transactions easier than ever.
The People’s Bank of China said only 10% of retail payments were made in cash in 2016 due to the rise of mobile payments.
Even so, according to industry experts, worldwide demand for paper money continues to grow. Estimated annual growth at 3.2% for the global market, currently valued at just under billion.
Asia and Africa are the fastest growing money printing regions.