Global Banknote Market Set to Surge with a Projected 6% CAGR Amidst Technological and Economic Transformations

According to Makreo Research, the global banknote market is poised for significant growth over the next five years, with an anticipated compound annual growth rate (CAGR) of 6% from 2023 to 2028. This expansion is driven by multiple factors, including the rising circulation of banknotes, the increasing need for faster and more accurate currency counting solutions, and the growing threat of counterfeit currency. The surge in counting errors and damaged notes has also compelled financial institutions and businesses to invest in advanced cash processing technologies, further propelling the market's growth.

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https://www.makreo.com/report/global-banknote-market-analysis-and-forecast-2028-edition-2024

► Increasing Demand for Enhanced Security Measures in Banknote Circulation
One of the primary factors fueling the growth of the global banknote market is the escalating prevalence of counterfeit and fraudulent notes. As counterfeit currency becomes more sophisticated, financial institutions are compelled to adopt advanced security measures to ensure the authenticity of their banknotes. This has led to a significant increase in the adoption of cash sorters and other currency security solutions designed to detect and prevent fraud more effectively. These technologies are becoming increasingly sophisticated, offering enhanced features that are difficult to detect visually, thereby providing an additional layer of security.

► The Rising Popularity of Polymer Banknotes: A Sustainable and Secure Alternative
Polymer banknotes are rapidly gaining traction as a preferred alternative to traditional paper currency, driven by their superior durability, lower environmental impact, and cost-effectiveness in production and replacement. According to recent data, as of February 2021, there were 1,026 different banknote denominations in circulation globally, with approximately 147 of them, accounting for around 15% of the global substrate market, made from polymer materials. This represents a significant increase from just 7% in 2019. Polymer banknotes, typically produced using biaxially oriented polypropylene (BOPP), have a lifespan estimated to be around two and a half times longer than that of paper notes, making them a more sustainable option for many countries. Some central banks, such as the Bank of Canada, are utilizing polyethylene terephthalate (PET) to produce their currency, highlighting the ongoing shift towards more durable and secure materials in currency production.

► Impact of Economic Policies and Shifts on U.S. Banknote Production
The United States has seen significant fluctuations in banknote production, particularly influenced by economic policies and shifts within the financial sector. In 2018, U.S. banknote production reached an all-time high, with a total volume of 7,539 million notes. This surge can be attributed to a combination of factors, including policies aimed at increasing interest rates within the mortgage industry, which, in turn, made mortgages unaffordable for many citizens. This policy shift contributed to a subsequent reduction in currency production volume. Moreover, the COVID-19 pandemic brought about severe economic disruptions, leading to a cash shortage across the U.S. market. The resulting cash crunch underscored the critical need for increased liquidity, prompting a surge in banknote production to meet the rising demand.

► Mexico's Currency Modernization: Transition from Banknotes to Coins
Mexico is undergoing a significant transformation in its currency system, with one of the most notable changes being the replacement of the 20-peso banknote with a new coin. This transition is expected to have a substantial impact on the country's currency circulation, as the 20-peso note has been a key denomination in everyday transactions. The shift to a coin not only aims to improve the durability and lifespan of this currency but also reflects a broader trend towards modernizing Mexico's monetary system. By adopting more durable currency forms, Mexico is aligning itself with global best practices in currency production and circulation.

► Eurozone Dynamics: Croatia's Integration and Continued Demand for Euro Banknotes
Despite a decline in consumer cash usage in recent years, demand for euro banknotes has remained robust, driven by the euro's status as a global reserve currency and its widespread use in international trade. Since 2002, euro banknotes have been produced collectively by the national central banks (NCBs) of the eurozone, with each NCB responsible for a portion of the total annual production. The banknotes, available in seven denominations (5, 10, 20, 50, 100, 200, and 500 euros), are crafted from pure cotton paper, giving them a unique texture that sets them apart from other currencies. A significant recent development within the eurozone is Croatia's official entry as the twentieth member of the euro area on January 1, 2023. This follows the European Union Council's decision on July 12, 2022, to approve Croatia's accession. Croatia's inclusion is particularly significant, as over two-thirds of its foreign trade is conducted with the European Union. Since joining the EU in 2013, the country has seen a steady increase in the proportion of exports and imports with EU member states, underscoring its deepening economic integration with the eurozone. Croatia's adoption of the euro reflects its growing alignment with the broader European economic framework, which is expected to further bolster its economic stability and growth.

► Key Developments in the Global Banknote Market

Recent developments in the global banknote market have highlighted the ongoing transformation and innovation within the industry:

• On December 13, 2023, the Central Bank of Samoa (CBS) announced an upgrade to its USD 5, USD 10, and USD 20 tala banknotes, which are being redesigned and printed by De La Rue, a leading banknote printing company.

• On July 06, 2023, Crystal Amber Fund increased its stake in De La Rue from 10% to 15.2%, reflecting confidence in the company's future growth prospects.

• On August 25, 2023, Giesecke+Devrient (G+D) anticipated the horizon of global Central Bank Digital Currency adoption, with 130 countries currently exploring its possibilities as digital payments continue to evolve.

• On October 5, 2023, JCM Global (JCM) and Giesecke+Devrient (G+D) entered into a collaborative partnership to enhance cash processing solutions, bringing more effective and efficient technologies to the market.

• On July 10, 2022, Crane Currency, a key player in banknote printing, announced the expansion of its Motion Surface micro-optics security feature, which is now available for all banknote substrates, including polymer.

• On November 16, 2022, ETH Store announced a collaboration with Orell Füssli to further advance security features in banknote production.

► Scope of the Study: Comprehensive Analysis of the Global Banknote Market
Makreo Research has published a comprehensive study titled "Global Banknotes Market Analysis and Forecast 2028: Edition 2024 - Focus on Currency Dynamics, Currency Production, Counterfeit Prevention, and Adoption of Polymer Banknotes." This report evaluates banknote production and circulation in both volume and value terms, considering macro-economic and industry-specific factors. It also assesses the impact of digital currency adoption on banknote demand, offering a balanced blend of qualitative and quantitative insights.

► Regional Insights and COVID-19 Impact Analysis
The report offers a detailed regional analysis, helping stakeholders understand the production and supply dynamics across major geographies. Additionally, it includes an in-depth assessment of the banknote industry's performance during the COVID-19 pandemic and forecasts future growth, considering other variables with high correlation to the industry.

For more information, please visit
Europe Banknote Market Performance (2018-2023)
https://www.makreo.com/report/europe-banknote-market-performance-2018-2023-currency-trends-production-dynamics-counterfeit-prevention-polymer-usage

North America Banknote Market Performance (2018-2023)
https://www.makreo.com/report/north-america-banknote-market-performance-2018-2023-currency-dynamics-production-counterfeit-prevention-polymer-adoption

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Makreo Research is a leading market research and consulting firm based in India, specializing in Syndicated Research, Custom Research, Consulting, and Market Surveys. With expertise in navigating complex market dynamics, we empower businesses to achieve success. Our services span a wide range of industries and geographies, including North America, LATAM, Europe, Asia-Pacific, Oceania, MENA, and more.

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