2000 Management report: Curreny circulation environment

By Central Bank of Brazil

Release of the bill celebrating the 500 year anniversary of the discovery ob Brazil

In celebration of the 500 year anniversary of the discovery of Brazil, Banco Central released a new R$ 10 bill on April 24, 2000, which is manufactured with a special plastic, polymer. This material, an alternative to paper, is already used in 14 countries. It is seen as more durable and secure against counterfeiting, since it permits the use of security devices that difficult to reproduce and that are easily recognizable by the public.

With the issue of this celebratory bill, Banco Central started a test of circulation with the purpose of evaluating the potentiality of this new material in light of the demands of Brazilian currency in circulation. Positive results obtained in preliminary tests with samples of the polymer, made by Casa da Moeda do Brasil, as well as successful experiences in the countries that already use it, have motivated Banco Central to conduct this field evaluation.

The graphics of the new bill, developed by Casa da Moeda in partnership with Banco Central, sought to join elements referring to the time of Discovery with the Brazil of today. The front side presents the image of Pedro Alvares Cabral, the Terra Brasilis map (one of the first records of the country), an excerpt of the letter of Pero Vaz de Caminha (which describes the first contacts of the discoverers with the new land), ships from Cabral’s expedition, and the image of a mariner’s compass card, a navigation instrument used by the Portuguese at the time of Discovery. The backside presents a styled composition of the current map of the country and several figures representing the Brazilian population, the result of a mix of indigenous, white, and black populations.

With respect to the security devices, the intention was to utilize the potentialities of the new material, combining elements similar to those already traditional in paper currency – water marks, security wires, latent images with micro paintings – to other innovative potentialities characteristic of polymer, such as a transparent window and verifying filter, an element of self-authentication of the bill.

In the end of 2000, 88.7 million of such bills were in circulation, from a total of 250 million, which should be issued by December 31, 2001. This amount represents approximately 50% of the total of R$ 10.00 paper bills in circulation. This will permit a comprehensive evaluation of the adaptation of the public to its handling, the durability of the material—under the conditions of the Brazilian currency circulation environment—and to the effectiveness of the security elements and the performance of the bills in money processing machines.

After the period of issue of the celebratory bill—years 2000 and 2001—, Casa da Moeda will again produce bills of R$ 10.00 only in paper, while an analysis of the performance of the polymer will be performed to evaluate the cost-benefit relationships.

The cost for testing the polymer R$ 10.00 celebratory bill is R$ 12.9 million, an amount corresponding to the difference in price between paper bills that would usually be acquired and the polymer bills issued. In the event that the durability of this polymer bill is confirmed (which is estimated to be four times that of paper bills), the savings with the performance of this celebratory issue will be approximately R$ 33 million.

In the period from October 6 to 9, 2000, Instituto Brasileiro de Opinião Pública e Estatística (IBOPE) performed a public opinion poll that found a good level of acceptance of the bill (89% of the those interviewed considered the polymer bill to be excellent or good, and 85% considered it better than that of paper). The main advantages indicated by those interviewed were: longer durability, difficulty to tear and to counterfeit, as well as the fact that the bills are not damaged or faded when wet.