Old Notes Give Central Banks Money To Burn

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Written By Gholam Rahmani

Central banks around the world have money to burn after taking bank notes worth billions out of circulation to fight organised crime and fraudsters.

Millions of high denomination notes have been withdrawn, while many other were retired for replacement with new designs.

But what happens to all that cash?

For the most part they went up in smoke as the bank literally had money to burn.

Millions of pounds worth of the notes were incinerated in the bank’s boilers to help heat the building.

Dirty money

But the boilers were upgraded in 1990, and since then, they have either gone to specialist energy recovery firms for burning or for recycling into compost. After composting, thee notes are shipped out to farms as a soil improver.

New polymer notes cannot be ploughed into fields. Instead, the plastics are recycled into other items, such as flower pots.

The Bank of England has had to process the withdrawal of 723 million £10 notes in recent months as they officially went out of circulation on March 1, 2018.

The bank estimates old banknotes worth up to £11 billion are recycled each year to stop them returning to circulation.

The Reserve Bank of India – the country’s central bank – must dispose of paper notes worth £167.5 billion.

They are mainly 500 and 1,000 rupee notes that the government withdrew from circulation overnight in a bid to crack down on black economy tax evasion.

Checked for counterfeits

Anyone holding the money had to exchange their savings for new bank notes at banks.

Hundreds of millions of notes have been checked for counterfeits before shredding and turning into briquettes for burning.

Consultancy Currency Research quizzed 110 central banks about how they disposed of unwanted bank notes.

Most supported incineration or recycling as the best way to get rid of unwanted money.

“Landfill disposal is strongly discouraged. Several suppliers have developed and offered solutions that may facilitate the transition to more environmentally friendly practices,” said a spokesman.

“Some governments and central banks have adopted best practices. Other central banks have encountered problems in doing so and do not have recycling programs in place.”