The Bank of England is preparing to introduce plastic banknotes as part of its new £1bn tender to produce sterling from as early as 2015.
The tender process, details of which were first revealed by The Sunday Telegraph last weekend, demands that potential bidders are able to cope with changes from paper bank notes to plastic or polymer notes from the start of the contract.
This is understood to be the first time the Bank has put a timescale on the introduction of plastic notes. The benefit of plastic is length of life, although there are cost implications.
Earlier this year the Bank’s chief cashier Chris Salmon said it has been investigating the possibility of polymer or hybrid substrate banknotes. It is understood that the Bank will initially introduce plastic notes for lower denominations which tend to be in wider circulation.
The tender notice issued by the Bank for the new note contract, which will run as far as 2029, states: “The [Bank] authority continues to review new security features including the potential for alternative bank note substrates...potentially this could be from the start of the contract.” Bank sources indicated that awarding it to a printer who could not cope with new substrates would prove to be costly in the long-term.
The current contract has been held by De La Rue (Other OTC: DELRF.PK - news) since 2003. Asked if he ever thought plastic notes would be introduced in the UK, Tim Cobbold, De La Rue’s chief executive, said: “That really is a question for the Bank. But you would expect that the Bank of England - it goes without saying - takes its responsibilities very seriously and it will absolutely know what is happening in the market place.”
A Bank spokesman declined to comment.