Planning for the new issue or replacement of a national currency has, for many countries, been made more difficult by the lack of consistent published information on the various aspects of this process. This paper attempts to ameliorate part of this problem by reviewing the main issues in designing, producing, and printing a new currency.
The paper discusses the problems that may arise when introducing or changing a national currency. Since many people view the currency as an important national symbol, design decisions may become emotional and contentious, resulting in long production delays. Yet the object of this exercise is usually to establish or restore confidence in the currency. Thus, the design selection process should minimize delays and seek to ensure that the currency is “user friendly,” durable, easily recognizable, and reasonably secure against counterfeiting. Key aspects of these design decisions are outlined, as are such issues as the initial value of the currency, the denominations to use, and the broadest considerations regarding the quantity of bank notes to print.
The paper also addresses the choice of who should print the currency, In the short run, it is often better to use a private printer, especially if the country lacks a bank note printing works. In the longer run, many countries may prefer to produce their own bank notes. However, the bank note printing industry appears competitive, partly because many countries have excess capacity at their bank note printing works.
Issues including the time involved in designing and printing bank notes, as well as the costs of producing various types of bank notes, are then outlined. The paper also argues that an educational campaign should be a prerequisite for introducing a new currency. While the primary objective should be to reduce the risk of counterfeiting, such a campaign will also help ensure that the currency gains immediate acceptance.
The paper reviews alternative steps that can be taken when there is inadequate time to produce new bank notes in an orderly manner. The favored alternatives include modifying the plates of the country that formerly printed the notes to print “new” bank notes and overprinting or affixing stamps to existing notes. However, each method may have its difficulties. The next best alternative is to print near-bank-note quality coupons. A country should avoid printing low-quality bank notes or hand stamping existing notes because of the risk of counterfeiting.