Evolution of Money

History of banknote substrates

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For centuries, natural fibers – primarily cotton – were the only raw materials used for banknote paper around the world. From the 1960s onwards, various companies tried to develop longer-lasting alternative substrates, essentially based on plastic.

First attempts with plastic

The best-known example of the problems associated with switching to a plastic substrate was in Haiti. In 1981, the central bank issued a 50 gourde banknote printed on the “innovative” Tyvek substrate from US chemicals company DuPont. The banknotes did live up to the physical demands placed on them, but there were huge problems with ink adhesion in circulation. This meant it was no longer possible to see the denomination. The project was halted in the mid-1980s.

At the end of the 1980s, the Reserve Bank of Australia developed a new polymer banknote intended to improve substrate quality, integrating a see-through window. This plastic substrate was first used in 1988 for the Australian ten-dollar commemorative banknote, which also incorporated a foil element. However, this foil feature turned out not to be sufficiently durable. So the central bank printed its next denomination, the five-dollar banknote, on plastic, and replaced the foil with a white printed element. Australia gradually switched its entire series to polymer banknotes from 1993 onwards. These were also rolled out in smaller neighboring states around the same time.

Cotton banknotes stride forward

Manufacturers of banknote paper also recognized the central banks’ need for longer-lasting and more secure substrates at an early stage. Since the mid-1990s, their focus has increasingly been on turning conventional banknote paper into tough “durable paper.” A significant advantage of this solution was that the tried and tested security features of cotton banknotes could be retained. At the end of the 1990s, the first banknotes featuring protective paper surface coatings entered circulation. These coatings increased banknote service life in challenging circulation conditions. The new banknotes were secure and, at the same time, less susceptible to soiling. To improve mechanical stability, too, some manufacturers mixed a certain quantity of synthetic fibers into the cotton paper. Banknotes printed on durable paper did achieve an increased service life, but there was still room for improvement.

Louisenthal recognized this further potential and started to develop a completely new banknote substrate that would combine the benefits of cotton and polymer. In 2008, Louisenthal launched this pioneering substrate: the Hybrid™ banknote.

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Examples of historical banknotes

Historical banknotes_eng