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Currency Conference 2008: Cash is Still King
26/12/2008 | Victor IONOV, Expert consultant, Member of IACA Statistics and Research committee
Banknotes of the World
A Currency Conference in Czech Republic (12—15 October 2008, Prague) — the largest international conference on cash circulation — became an extraordinary event because it was the first conference in an Eastern European country out of all 11 conferences since 1992. The Prague conference provoked a considerable interest of central and commercial banks, producers of banknotes and equipment, and technological developers, or in a nutshell, all members of the world currency industry.
The Czech capital met the participants with a fantastic autumn and sunny weather so that they could get familiar with the city in detail on Sunday, 12 October, the day of registration, and on 16 October, when the visit to the museum of Ceska Narodni Banka and its exposition "People and Money" was arranged.
The conference was held at the Hilton Prague hotel situated 15 minutes away from the Stare Mesto (Old City) on the Vltava River embankment. The hotel’s conference facilities have one of the biggest capacities in Europe. Probably this was the reason why the number of participants of the Currency Conference 2008 bit the record of its sixteen-year history — about 540 delegates from 80 countries. Thus, for the first time the mark of 500 was exceeded (the previous record, 476 delegates from 79 countries, was achieved in May 2007 at the Bangkok conference).
During the three days of the conference 9 sessions were held and 35 presentations were made by the leading world experts. Thirty six booths of the exhibition, arranged in three halls of the lobby near the conference-hall exhibited achievements of the leading world suppliers (in alphabetical order): ArjoWiggins Security, Crane Currency, De La Rue, Drent Goebel, Fabriano Securities, Giesecke & Devrient, Hologram Industries, Jura JSP, KBA-GIORI, Komori, Kurz, Kusters Engineering, MEI, Oberthur Technologies, OeBS, Securency, SICPA, Toshiba, Wincor-Nixdorf and others.
Russia was represented by two sponsoring companies. Traditionally they were Goznak (gold sponsor) and MK-CB (International books-Securities) (silver sponsor), the oldest Russian trade company, established in 1923 and engaged in the export of security printing products and equipment: banknote paper and printing inks, printing equipment, passport and identification card blanks, as well as organizing the construction and equipping of the printing facilities and bank depositories (Il. 1).
Goznak experts presented the newest developments in the field of security for banknotes and securities ("Prof. Yakobi" and "Admiral Bellingshausen" banknote samples, Il. 2), as well as modern banking equipment: BARS 5200 and 5600 banknote sorters, BARS 3000, Davis-C6E of the expert combined class, Davis-03M combined check tool and others.
Besides, Andrey Kuriatnikov, Goznak deputy general director for R&D, made a presentation titled "Integrated solutions for banknote security" and described the complex applications of security features in various types of paper, various printing methods, and using different special inks.
The conference was organized and held by its director Victioria Alanis, the permanent chairman of all the conferences Richard Haycock, and its "headquarters" were headed by Adrian Baxter, president of Currency Research Ltd.
It is the continuous efforts of the Currency Conference management that enables many delegates to meet each other not just as colleagues but also as good old friends. The Il. 4 shows Lyudmila Pryazhnikova, General Director of InterCrim-press meeting with Larry Felix, Director of the US Bureau of Engraving and Printing; and Tomas Ferguson, former director of the BEP and Antti Haynonen, director of Banknotes of the European Central Bank. It is worth mentioning that both of them are the winners of the award "For outstanding contribution to the development of cash circulation" granted by the IACA in May 2007 (Editors: We are going to tell about other winners and nominees of various IACA awards in 2008 in the rubric "IACA News" in BoW December issue).
Let us take a peak at the most interesting presentations and materials of the Prague conference. Traditionally the Currency Conference is devoted to three main aspects: organization of cash circulation, equipment and processes in cash handling (including the destruction of banknotes and coins unfit for further use), and the implementation of the newest security features and processes in the production of monetary units.
Experience of the Organization of Cash Circulation and Its Perspectives
First session of the conference was opened with the presentation by Antti Haynonen "An Update on the Euro Banknotes and the Way Forward towards the Second Series". He stressed the following points in his report:
• Current state of the Euro banknotes
• Development of the Euro banknote circulation
• Improvement of cash circulation management in the Euro area
• Estimate of the situation with Euro counterfeiting
• ECB schedule of introduction for the second series.
Mr. Haynonen characterized the current state of Euro banknote circulation as well as the Euro system’s measures aimed at enhancing the effectiveness of cash circulation, such as convergence of cash service principles in national central banks, banknote recirculation system in the European Central Bank and others. He covered these issues in detail and described the ECB’s accumulated experience and its future plans concerning the improvement of cash circulation in the Euro area what provoked a great interest from the conference delegates.
As to the European Central Bank program of preparing the euro-2 introduction, its main stages will be completed by the late 2010. It is scheduled that the euro-2 denominational structure will consist not of two, as it is now, but of three groups: middle denominations — 20, 50, and 100 euro, low-dem — 5 and 10 euro, and high-dem — 200 and 500 euro. The security features of banknotes within these groups will be unified, like it is now.
From the presentation by Eugenia Foster (until recently, one of the leading experts of the US Federal Reserve) "IACA’s Global Payment Study" the delegates found out about some interesting preliminary results of one of IACA projects. She characterized the contents and development of the Global Payments Survey Project (GPSP) intended to study the management of various types of payments and their effectiveness. These results may be used by central banks of various countries. Preliminary estimates show that by 2015 the forecast share of cash payments may vary from 25% to 75% in various countries.
The speakers representing the Federal Reserve System of the USA, central banks of Austria, Belgium, Canada, Chile, Czech Republic, Hungary, Kyrgystan and Kazakhstan, the Netherlands, Norway, Tanzania, and the UK shared their experience of the organization and management of cash circulation.
The speaker from the Banco de Espana in the presentation "Have people learned to love Euro banknotes yet?" told about the public perception of Euro banknote security features in Spain. According to the results of the study (1213 polls and 1009 polls among shop, hotel etc. personnel working with cash on a permanent basis), held in 2005—2008, 92.5% of Spain’s population use cash, while debit and credit cards are used by only 27.7% and 21.4% accordingly. The overwhelming majority of people treat euro banknotes in a positive way, with the design and tactile perception of paper being the most popular security features used in practice, as well as the security thread, watermarks and holograms. The color (61%) and dimensions (14%) of the banknotes are considered the most comfort way of distinguishing denominations.
As a whole, from the presentations on the organization of cash circulation and its perspectives, it follows that main tendencies in the world cash circulation persist and develop constantly, such as the globalization of circulation processes; increasing volumes of cash and its turnover as a whole and in individual states; outsourcing in manufacturing, introducing cash into circulation, handling and destruction of cash; automation of cash handling; centralization of cash handling; optimization of cash flows; enhancing quality and security features of the banknotes.
One should not forget that the presentations were prepared on the eve and in the period of development of the world financial crises. In connection to this, some new tendencies will emerge by all means, and new solutions for cash circulation management will be found that we will learn of at the next Currency Conference.
Equipment and Processes of Cash Handling
This group of presentations, as well as exhibits at the booths, was presented mainly by the world leaders like Giesecke & Devrient, De La Rue, Toshiba joined by Goznak, which demonstrated its family of BARS (models 5200, 5600, and 3000) table-top banknote sorters. The description of a wide range of destruction systems for banknotes, special documentation and coins — from individual installations to powerful conveyers were presented at the booth of the Netherlands-based company Kusters Engineering.
The largest such system are used in the Federal Reserve Bank of New York and in the cash center of the Bank of Russia in St. Petersburg.
Germany-based Giesecke & Devrient traditionally exhibited solutions that integrate the achievements of the Papierfabrik Louisenthal papermaking factory with the newest printing processes and a wide range of cash handling equipment — from mini sorters Xensor to powerful systems such as BPS 1000, 2000, and 3000.
New DLR7000 banknote sorter with the handling capacity up to 2000 banknotes per minute, as well as ECM (Enterprise Cash Management) automated cash management system were shown by De La Rue. At the same booth the most modern security features developed by its subdivision, De La Rue Currency, were demonstrated. The latter includes the StarChrome® Colour security thread, combining the advantages of the thread color variability with the merits of demetallized text. Another novelty security feature is a special type of latent image called TiltTM emerging when the banknote is tilted.
The materials regarding new FS 1220 banknote sorters together with the whole line of its products were presented by Toshiba. This line includes print quality control systems, banknote sorters for commercial banks, as well as sorting systems for central banks and major cash centers.
The recently established NLC (Non-Linear Concepts) company headed by the former technical director of the Currency Systems International (CSI) Soheil Kajani suggested original solutions for making modern sorting complexes.
At the booths of the world leading printing equipment manufacturers KBA-GIORI (Switzerland), Komori (Japan) and Drent Goebel (Germany) visitors might see the capabilities of the modern systems for printing and production.
Newest Security Features and Their Production
These subjects were, as usual, covered in a way so extensive that it appears impossible to tell about them in detail in this review. Probably, we have to address them in the next BoW issues, as well as to the story of the competition held by the International Association of Currency Affairs (IACA) and its results and winners.
Now we may note that besides the above mentioned developments by Goznak and De La Rue Currency, such companies as ArjoWiggins Security (France), Crane Currency (USA), Hologram Industries (France), Jura JSP (Austria-Hungary), Fabriano Securities (Italy), Kurz (Germany), Securency (Australia), SICPA (Switzerland), Papierfabrik Louisenthal, and other presented their achievements.
Let us hope that the gallery of samples that we presented will give at least a general impression of the new information on security technologies presented at the Prague conference.
Summing up the review I would like to underline that the 12th Currency Conference in 2008 became a new step towards the development of all aspects of cash circulation determining the main tendencies and fashions for the nearest year and a half. The next Currency Conference will be held in May 2010 in Buenos Aires (Argentina).
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