Shredded snippets from banknotes
#Currency Management

Banknotes at the end of their life

4 Mins.

When it comes to upholding security in the cash cycle, the processes that occur from the moment a banknote reaches the end of its life are just as important as the processes that have taken place beforehand – if not more so.  Ferdinand Storek, Head of Banknote Destruction Systems at G+D, explains how central banks navigate the many requirements for banknote destruction to achieve maximal security.

Banknote destruction is much more complex and intricate than simply shredding banknotes. Too big and the banknotes shreds aren’t secure; too small and efficiency is lost. By effectively destroying banknotes, central banks ensure that unfit banknotes can no longer be put into circulation. Ferdinand Storek explains, “If banknotes are put back into circulation that should actually have been destroyed, the damage is irreparable. This is why we guarantee zero theft with our systems in operation.”

Security is of utmost importance to banknote destruction processes as this ensures that unauthorized access cannot occur and that banknotes are irreproducible. This is where shred size comes into play. “If banknotes are destroyed in small enough shred sizes that follow predefined standards, it is impossible for them to be put together again,” says Storek. In practice, a shred size of 36 mm² guarantees exactly this. “We offer solutions to our customers, which start at 25 kg and end at far more than one ton of banknotes per hour. After being shredded, banknotes are collected in a silo and mixed, then compacted. The probability that I will find a banknote again or re-assemble one from hundreds of billions of shreds is impossible.”

“If banknotes are put back into circulation that should actually have been destroyed, the damage is irreparable“
Ferdinand Storek
Head of Banknote Destruction Systems at G+D

Meeting different requirements

Central bank regulations, as well as the technology in use in the wider cash cycle, also have an impact on banknote destruction processes. To account for different needs, central banks may use online or offline shredding for banknote destruction, or a combination of these. In most countries, central banks also rely on commercial banks and CITs to pre-classify notes or to sort and classify the banknotes internally, since banknote quality is a key factor for user confidence in any given currency. Each central bank sets the threshold values for unfit banknotes itself. In the destruction process, the quantities of banknotes and the substrates used are crucial. Depending on the material of the banknotes, shreds are then suctioned and compacted into briquettes, bags, or containers.

Despite the varying market requirements around the world, according to Storek, there is one component that completely transcends borders: “Security must be maintained at all times, in terms of access to the system at operation, access to storage, and the possibility of re-assembly after destruction. This means no unobserved handling of banknotes, no unobserved bundles, and extremely secure working environments. We have one standard, and that is to provide highest security.”

Published: 25/11/2020

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