Posted by Allison on 4 April 2009, 10:24
That's a very good question – the most any of us think about how long our money lasts is how long we can hold onto it after we get paid, until we have to start giving it to other people for our mortgage payments, loans, food, necessities… and so it goes on.
But of course everything has a lifespan and the banknotes and coins that we use every single day of our lives are no exception. But is there a difference to how long notes and coins last in each country? Does it matter what they are made from? Why is it that every now and again you are given a horrible fragile looking banknote in your change that you daren't even try and fold, for fear that it will disintegrate altogether? And what happens to old banknotes and coins when they reach the end of their useful life?
If you do come across a banknote in dreadful condition you should be able to take it in to your local bank and swap it for a newer one. Banknotes which are in bad condition are periodically taken out of circulation so that newer ones can take their place. The old notes are then generally shredded.
If you were around in the early Eighties in Britain, you will remember the sad day when the green one pound note finally bit the dust, heralding a new coin to add to our pockets in the shape of the one pound coin. The British public may not have liked it to begin with, but as far as the powers that be were concerned, the pound coin was going to be a lot more user friendly than the more fragile banknote.
That's one of the reasons why the American government is continually thinking about getting rid of the dollar note and replacing it with a dollar coin, although attempts to get the Americans to like the dollar coin so far have proved unsuccessful.
Speaking from a monetary point of view, the fact is that coins are more cost effective than banknotes – whatever country they are used in. Coins can last for decades whereas a banknote will last maybe a year or two. It obviously depends on how often the note is used, so you'll find the lower value notes will bite the dust far sooner than the higher value ones. Think about how many crumpled and sub-standard five pound notes you have probably come across during the past few years, for example. Now, how many sub-standard fifty pound notes have you come across?
The chances are that you haven't even seen too many fifty pound notes, since most of us don't come into contact with them that often – that's why they last a lot longer.
But what happens with coins? It seems a little strange that we can find ancient coins from centuries ago buried in the ground, and yet our own coins only last around a quarter of a century or so before they have to be replaced by new ones.
Firstly it is important to understand that when we talk about coins only lasting for a certain number of years, they are of course capable of lasting for much longer. The point is that they become worn to the point that they no longer meet the standards that should apply to every coin in circulation. We could go on using our coins for a lot longer than we do, but beyond a certain time they will start to wear down and become less easy to read.
Money is also a different entity to us than it was to our ancestors. Coins made in times gone by weren't passed from hand to hand as often as they are now, and if you really go back in history they were made from precious metals like gold and silver. Today's coins just aren't up to the job of lasting centuries – we put them through too much to expect that of them.
So what happens when a coin has had enough of being handled by us humans and it is withdrawn from circulation?
You'll be pleased to know that the various mints around the world that are responsible for making the coins we carry around with us every day are very into recycling. Quite simply, they melt down the coins to form new blanks – sheets of metal which are then used to make the next batch of coins. So the money you have in your pocket might well be second, third or even fourth generation money. It's quite a thought.
If you go online and read about banknotes in any depth you'll often hear people talking about paper money. But that is more of a saying than a correct term; after all if banknotes were made of paper they wouldn't last five minutes let alone eighteen months, as the American dollar notes do.
In actual fact American banknotes are made of cotton (which is why you can wash them and get away with it!). This does make them last longer, although after a few months of being used and tucked away in someone's wallet they still start to break down in quality.
Some countries have started to introduce a different type of banknote which lasts longer than the more traditional types, in the hope that they will be more cost effective. A good example of this is the polymer banknote, which has been in use in Australia for some years now, among other places.
A polymer is basically a type of plastic, so you can instantly see that this results in a much stronger and longer lasting banknote than the old paper choice, which didn't have what it takes to go the distance against the polymer version.
Just like old coins, which are recycled into new ones wherever possible, polymer banknotes will also go the same way. They won't necessarily be recycled into more banknotes though; because they are made from a plastic substance they can be turned into pretty much anything else which uses plastic.
But there are a couple of slightly weird features that go with having longer lasting banknotes which are essentially made from plastic. Firstly you won't be able to fold them like you can a regular note; it's literally like trying to fold a thin sheet of plastic, so you can imagine how tricky it could be.
Zambia, who is also now using this type of banknote, has introduced a feature which you would never see on a paper banknote. It has a transparent window through which you can actually see. Although it's an unusual and slightly quirky feature it has certainly given the counterfeiters something new to think about, since it makes it even harder to forge the polymer notes.
So there you have it – an insight into the life and times of coins and banknotes. It certainly makes you look at your small change and large bills a bit more closely, doesn't it? While we don't have polymer notes in Britain as yet, given the success they have had overseas it may only be a matter of time before we see them over here too.