Statistics show that over the last five years the number of banknotes in circulation rose from 5–7% each year. Globally, there are now over 576 billion banknotes in circulation,1 with an average lifespan ranging from under 12 months to several years. About 150 billion banknotes are printed every year to replace the worn notes taken out of circulation.
Today, banknotes are high-tech products with many security features distributed over well-defined security levels. Before a banknote enters circulation, it passes through numerous production steps and security tests. After the production of the banknote substrate and the integration of security elements into the paper, printing and inspection take place, followed by cutting and packing of the finished notes.
The lifespan of a banknote can be determined by laboratory tests. A circulation algorithm developed by G+D Currency Technology simulates the wear and tear on banknotes in circulation. The test reveals the impact of environmental influences on banknote “fitness.” This means, for example, that in subtropical climates there are different demands on banknote material and resilience than in cooler climates.
All these factors that influence the length of time that a banknote can stay in circulation are considered by central banks when they establish specifications for the design and production of new banknotes.