#Currency Management

Building circularity into the cash cycle

4 Mins.

Almost every aspect of human activity – whether at an individual, corporate, or government level – is now being examined through a sustainability lens. The cash we all use is no exception. While demand for physical currency continues to grow in almost every country worldwide, its journey – from creation to circulation to disposal – has the potential to be more eco-friendly.

In the face of spiraling environmental challenges, we are all being urged to live by the three Rs: Reduce, reuse, recycle. It’s an entreaty designed to shift both individual and economic behavior away from the centuries-old model of linear economics, in which production and consumption are inevitably followed by environmentally impactful disposal.

To ensure a sustainable future, the linear model needs to be replaced by a model rooted in the natural concept of circularity, where resources are used efficiently and renewable inputs are prioritized; where a product’s usage and lifetime is maximized to extract the maximum value; and where by-products and waste are recovered and reused to make new materials or products.

As the UK think-tank Chatham House puts it, circularity is an economic model that “entails redesigning products to be more durable, reusable, repairable, and recyclable, and therefore kept in circulation for as long as possible.” 

Exponents of the model argue that industry’s requirements for efficient processes and solutions don’t have to be in opposition to the protection of our planet. Of course, that is a lot easier said than done. The Circularity Gap Report 2021 claims that our current global economy is only around 9% circularity-based, in terms of material inputs.1 The better news is that to prevent the worst effects of climate breakdown, we only need to get to 17% circularity to close the gap.1 But every area of commercial activity needs to play its part – including cash.

In the cash cycle, responsible stakeholders are working together to make circularity central to their operations and to those operations that overlap with their partners’. Here are some key ways in which such moves are being fostered, and indeed accelerated:

Standardized, optimized banknote handling

Current models for the transportation, exchange, and storage of banknotes are full of opportunities for greater circularity.

Today, at each position in the cash cycle, different players have operational requirements and priorities that govern their selection of cash transport units. Cash-in-transit (CIT) companies might opt for plastic safebags to meet a requirement for fast and easy exchange at retail endpoints, while commercial bank cash centers might choose to standardize trays that facilitate the automated processing of loose notes.

However, an investigation by G+D has concluded that the greater use of standardized cash transport units at key points in the cash handling cycle has the potential to deliver major sustainability benefits, and reduce waste in terms of time and resources. By using standardized plastic trays, such as G+D’s NotaTracc®® tray, the movement of cash between and within cash centers can be highly optimized. And the adoption of standard, stackable plastic boxes would encourage the reuse and exchange of banknote transport units between cash cycle players, eliminating single-use formats.

Such sustainability ambitions can’t be achieved in isolation, of course. Collaboration models need to be built between the different cash cycle players to establish the overall transport solutions that maximize sustainability across the operating areas of different players.

Sustainable lifespans for banknotes

Wear and tear degrades all things, banknotes included. Climate, harsh treatment, and the choice of material: they all play a part in how a banknote fares in its journey from printing press to withdrawal.

Each year, billions of banknotes are shredded and replaced globally with brand-new ones (about 25% of the total in circulation at any one point) to replace worn-out notes that need to be taken out of circulation and destroyed. Central banks in several countries have been using the argument of durability to put polymer banknotes in circulation for years. However, the plastic used in their construction is environmentally problematic.

G+D green banknote
Green banknotes are a key component of a sustainable cash cycle

As a leader in the cash cycle, G+D is pioneering sustainable solutions through innovation. The longevity of the banknote remains key to its sustainability. The life of G+D’s new Green Banknote is no shorter than that of a polymer one, and generates 29% less CO2, using 86% less plastic than its polymer equivalents.

The focus is on using renewable materials, including eco-friendly inks. Even the parts that must be made of plastic, such as the security thread, are derived from 70% recycled polyester. Its core is made from natural, renewable fibers: 50% come from organic cotton noils, while the other 50% is made up of fibers such as certified wood pulp sourced from responsible forestry.

Circular life for banknotes

G+D’s BDS® banknote destruction systems already led the field in terms of efficiency and security, capable of destroying up to 1.5 tons of notes per hour. They also play a role in creating exciting new possibilities for recycling and repurposing their output materials, for example in the waste-to-energy area. Composting is another use that is being considered. Research and an appetite for innovation are opening up many new ways in which banknotes can be utilized once they reach their end-of-life within the cash cycle.

G+D takes its responsibility as an industry leader very seriously, and sustainability is at the heart of its future plans. However, this is a collective endeavor we all have to engage in, if we are to be successful. The Green Banknote and other initiatives like it thus have a role to play in starting conversations in this space, so that we may all benefit together.

Stakeholders in the cash cycle are reacting fast to the same environmental imperatives that we all face – if we are to leave our planet at least as healthy as we found it. Circularity and sustainability may not be the same thing, but if we keep the latter firmly in mind, then we can fully embrace the former.

  1. Circularity Gap Report 2021, Circularity Gap Reporting Initiative, 2021

Published: 28/02/2023

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