Banking

What is Paper Money Made of

The basic component of bank notes is cotton which is infused with fibers, alpaca and/or linen to enhance qualities. Polymer bank notes are made up of synthetic polymers.

According to the Cambridge dictionary, a bank note is “a piece of printed paper that has a particular value as money”. Simply put they are the modern ‘notes of money’ as we know them. We can trace the use of currency notes back to as far as the 7th century in China, and many years later in Europe. The question that “What is paper money made of?” is very intriguing in nature.

The basic component of bank notes is cotton paper. But to make it resistant to wear and tear, other components are added. It goes through certain procedures to make it different from the ordinary paper in use. It is infused with fibers, alpaca and/or linen to enhance its qualities to make it into the money everyone cherishes. Furthermore, the very feel of the note is distinctively different from the regular paper that we use on daily basis. This is made possible by refining the materials till that unique feel of a note is established.

The paper which serves as raw material for bank notes is infused with gelatin and not water, like all the rest of the paper. This changes how paper money feels compared to other paper by giving it a certain strength and resilience.

Security Features

Bank notes incorporate certain threads or fibers i.e. red and blue fibers for security purposes hence making it harder to make duplicates or counterfeits in the form of fake currency notes. These threads, based on their quality are the main determinant of security of banknotes. Their quality of course is dependent on the constituents like fluorescent, metallic, magnetic elements. It is important to understand that these fibers are incorporated into the note and are not merely lines on the surface.

Another interesting feature is the watermark on any piece of currency. This is made by changing the thickness of the paper to make it thicker/lighter than the rest of the note. This feature is also intended to increase security.

Polymer Banknotes

And then we have polymer bank notes which were developed in Australia and are made up of synthetic polymers like biaxially oriented polypropylene (BOPP). They have significant qualities that give them an upper hand over the traditional ones. They are much more resistant to wear and tear, more durable and have additional security features. Their durability allows them to have a longer life which greatly reduces the energy and cost required to replace traditional currency paper. Many countries have already switched to the more sustainable polymer banknotes including UK, Egypt, Romania, Canada, Maldives, Mauritania, New Zealand and the list goes on.

Polymer currency notes have quite a complicated system of security that comprises of three levels: Primary security devices, Secondary security devices and Tertiary security devices. The primary security devices are those that can be noticed by users and can be as simple as metal strips. The Secondary security devices are programmed to be only detected by a machine. Whereas the Tertiary security devices can only be detected by where they were originally issued from. These levels of security on polymer currency notes are almost impenetrable compared to the paper money made up of cotton.

Over the past, many other materials have also been used to make bank notes. Silk and leather being one of them. Initially these banknotes were actually hand written with ink. Sufficient evidence is also available of currency notes made up with linen or velvet, even wood. Thankfully paper notes have replaced them as we know them now. However, experts believe that virtual money such as cryptocurrency will eventually replace this paper money. The question “what is paper money made of” will loose its significance after certain time.

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