Case Studies

Bhutan benefits from Hybrid banknotes

From snowy peaks to tropical forests: Kingdom with climate extremes in the eastern Himalayas uses Louisenthal’s resilient substrate for lower denominations

The Royal Monetary Authority of Bhutan (RMAB), Bhutan’s central bank, reissued its 1- and 10-ngultrum banknotes in 2013 using Hybrid™, a paper/polymer substrate made by Louisenthal. Ideal for notes subjected to frequent handling and challenging climatic conditions, Hybrid comprises a cotton core that ensures the substrate offers the security benefits and familiar feel of traditional banknotes. But the core also features a thin polyester laminate coating that increases the durability of the banknote, even in extreme temperature and humidity conditions.

The independent Kingdom of Bhutan is located at the eastern end of the Himalayas. Most of the country is covered with rugged mountains, whose higher regions have snow and even polar conditions for most of the year. In contrast, southern Bhutan’s climate is tropical and subtropical with hot and humid weather that doesn’t change much throughout the year. This wide range of weather conditions affects the country’s banknotes almost as much as its people, which was why Bhutan had to reprint its low-denomination notes as often as every six months.

Hybrid: for countries with challenging climatic conditions

Countries with demanding circulation conditions require a resistant substrate that offers longer circulation than that of regular cotton banknotes, while remaining highly secure throughout its lifespan. This is why the RMAB decided to modernise its 1- and 10-ngultrum notes in January 2013 by using Louisenthal’s innovative Hybrid substrate. Hybrid’s lifespan is estimated to be two to three times longer than traditional cotton-based notes, while maintaining security and reducing printing costs.

A significant benefit of Hybrid is the fact that it presents the same soft feel as a standard note. This reassures the public that the notes are genuine, especially as Hybrid can also integrate familiar security features, such as watermarks and security threads. This is important in Bhutan, where over 60% of the population only use cash for transactions and don’t have a bank account. Another advantage is that central banks like the RMAB can implement the changeover to Hybrid on their systems without major effort. As well as Bhutan, several other countries in Africa and the Americas already use Hybrid banknotes.

“Gross national happiness” in Bhutan

Statistically, Bhutan is estimated to be one of the world’s least developed nations, although the government has made progress in recent years to reduce poverty levels. Jigme Khesar Namgyel Wangchuk has been King of Bhutan since 2006 and his portrait appears on the front of the 10-ngultrum banknote. His father, Jigme Singye Wangchuk, who abdicated in 2006, coined the term “gross national happiness” (GNH) to describe his country’s economic and cultural objectives – and to this day the government uses GNH as well as GDP to guide its policy formulation. This strategy is reflected in the Buddhist symbols of happiness that also adorn the new banknotes. And with Hybrid, they’re likely to be visible for a long time to come.

Further Reading