New banknotes unveiled
Bank machines not yet equipped to handle new currency
- Cash machines will need to be modified
Canadians are accustomed to paying for things with plastic in the form of credit cards. But once new bills unveiled Monday become prevalent, the difference between cash and plastic will be even blurrier.
Officials at the Bank of Canada and the federal Department of Finance were on hand to unveil new bills on Monday, destined to soon enter the Canadian economy.
To be precise, they're not quite plastic, but rather made of a polymer, a smooth durable film developed specifically for bank notes. Similar bills are already in use in a number of countries around the world, and they replace the current cotton-and-paper versions in circulation.
The first one to be available as legal tender will be the $100 note, starting in November. It depicts Canadian innovations in the field of medicine. The bill will feature an updated portrait of former Canadian prime minister Robert Borden.
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That release will be followed by a new $50 bill in March, then versions of the $20, $10 and $5 by the end of 2013.
All will be equipped with the latest in anti-counterfeiting technology. The main features are two transparent windows built into them that make them difficult to forge but easy to verify. One extends from the top to the bottom of the bill and has holographic images. Another window is in the shape of a maple leaf.
Counterfeiting became a major problem between the years 2001-2004, when it peaked at 470 fake bills for every 1 million in circulation. Since then, officials have been able to use new technology to get that figure down to only about 35 phony bills for every 1 million in circulation today.
The new bills will cut that down further still, Bank of Canada officials said Monday.
"These new and technically innovative notes will go a long way to deter the threat of counterfeiting in coming years," RCMP Commissioner William Elliott said.
The bills will be 2.5 times more durable than the cotton and paper ones currently in circulation. Their durability means that there will be less of a need to reprint new notes on a regular basis. That alone will save $200 million over the life of the series, officials say. The bills will have a smaller environmental footprint, and they're also recyclable.
The Bank of Canada will now begin a public awareness campaign to help consumers and confused retailers get used to the new bills and be better able to spot fakes.
Systems may need upgrading
In addition to public perception, there's another factor that needs overhauling before the bills will be widespread — the country's network of cash-handling machines. The design of the new bills means they can not integrate seamlessly with current technology.
There are currently 55,000 automated banking machines across Canada, and countless other machines that count or deal with cash in one form or another.
"Every time we change a series, there's a transition period," Bank of Canada spokesperson Julie Girard told CBC News in an interview. "Some equipment may require modification [and] some equipment will require modifications."
"It will be an additional transition because you're changing the base material," she said. But the bank chose to roll out the new bills six months ahead, with a bill that's less common — the $100 — to ease that transition period, Girard said.
And she notes that the longer life span of the new bills will make them more than worthwhile in the long run.
"We will be phasing in these new bills, working closely with financial institutions and manufacturers of bank note equipment to ensure a smooth transition from cotton-paper to polymer," Bank of Canada governor Mark Carney said in a speech following the unveiling on Monday.
"These new bills are not only more secure; they are also more cost effective," Carney said.
With files from Fabiola Carletti, CBC News