After it has experimented with ultra-low interest rates and various bond-buying program in order to keep rates from rising, Bank of England is now considering another innovative measure – introducing plastic banknotes.
It announced on Tuesday that it is starting a public consultation over whether to replace cotton-paper £5 and £10 bank notes with plastic-feeling polymer “fivers” and “tenners” in 2016. The new bills will have the British Second World War leader Winston Churchill on them. If this idea is realized it will represent another break with tradition for the 319 year old institution, which is currently for the first time chaired by a foreign-born governor – Marc Carney. Mr. Carney introduced polymer bank notes in Canada when he was a head of the central bank there. Many Canadians were unhappy about this move, complaining that they clogged up vending machines and melted in the sun. Furthermore a lot of botanists remained unimpressed, as the new banknotes appeared to display a European rather than North American maple leaf.
According to senior Bank of England officials, coincidence of the discussion about whether to introduce plastic money with the arrival of Carney as a governor in July is accidental. Polymer bank notes are in use in more than 20 countries, including Australia, New Zealand, Mexico, Singapore and Fiji, the bank said. They have some history in UK as well. Northern Ireland, which allows to local banks to issue their own currency has seen such notes issued by Northern Bank, now owned by and rebranded as Danske Bank A/S.
Some of the advantage of the polymer notes include, being longer-lasting than the paper currency and being harder to counterfeit as well. Mr. Churchill and novelist Jane Austen will probably be the first famous Britons to feature on the bills if they are approved to enter circulation.