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The Reserve Bank of Australia (RBA) has issued its first quarterly bulletin this month, which includes an article detailing the Next Generation Banknote Project.

Australia, which issued its first polymer banknotes in 1992, announced in 2012 that they were to begin planning a new banknote series in order to deter counterfeits in circulation “consistent with its responsibility under the Reserve Bank Act 1959 to preserve confidence in Australia’s banknotes.”

Though the use of electronic payments in Australia has seen strong growth, the demand for cash has also risen with around 1.3 billion banknotes in circulation as at 31st December 2013. The Consumer Payments Use Study by the RBA in 2010 identified that cash accounted for the greatest share of consumer payments, “62% of all transactions and around 80% of transactions under $25”.

The Bank advises that the number of counterfeits in circulation in Australia is low in comparison with other countries. However, the Bank advises that the victims of counterfeits are often small retailers and the general public “who can less easily afford to bear either the direct cost relating to the face value of the counterfeit passed, or the more expensive indirect cost associated with installing and using banknote authentication equipment”.

“Even low levels of counterfeiting activity can lead to diminished confidence in the counterfeited denomination, resulting in consumers rejecting cash payments altogether.”

Image courtesy of the Reserve Bank of Australia

Due to the rise in counterfeits, though still considered low by the Bank, and the need to ensure that confidence in the currency is maintained by the general public, the Bank has been participating in research for new anti-counterfeiting security features for the past few years. This has included assessing over 200 security features based on “the criteria of resilience to counterfeiting, functionality, durability, production-readiness and cost of production”.

To read more about the Next Generation Banknote Project, read the Bank’s March bulletin article here.

For more information about Australia’s current banknote series, visit the Reserve Bank of Australia’s banknote website.