Friday, July 25, 2025

How it works: Currency

Canadian Currency

How it worksCurrency is more than just paper or metal—it’s a highly secure product designed to resist counterfeiting and ensure the smooth functioning of an economy. The process of making money involves precision, advanced technology, and strict oversight. Each country has its own method, but the fundamentals are quite similar around the world. Here's an in-depth look at how physical currency—both banknotes and coins—is created.


Banknotes (Paper Money)


1. Design

The creation of currency begins with design. This isn’t just about appearance—it’s also about incorporating security features to prevent fraud. Graphic designers, historians, and security experts work together to decide which portraits, landmarks, symbols, and patterns to include. For example, Canadian bills often feature notable figures like Viola Desmond or prime ministers, alongside national symbols such as maple leaves and indigenous art.

Advanced software is used to add intricate line work, microprinting, holograms, raised ink, transparent windows, and colour-shifting ink. These features make it extremely difficult to replicate banknotes illegally.

2. Substrate Production

Modern banknotes are no longer made of paper alone. Many countries, including Canada, use polymer—a type of plastic material that is more durable, waterproof, and tear-resistant than paper. Polymer sheets are created specifically for currency use and often arrive at the printing facility with some embedded security features already in place.

3. Printing Process

Banknote printing is carried out in several stages:

  • Offset Printing: The first step adds background colours and patterns.

  • Intaglio Printing: This adds fine details and raised ink, which can be felt with your fingers.

  • Screen Printing and Foiling: This applies transparent windows, holograms, and other high-tech features.

  • Numbering and Coding: Each bill is given a unique serial number and tracking code.

All this happens under tight security in government or central bank-authorized facilities such as the Bank of Canada’s contracted printer or the Royal Canadian Mint.

4. Inspection and Cutting

Each sheet of bills is examined—both by human inspectors and automated machines—for imperfections. Any flawed bills are destroyed. The accepted sheets are then cut into individual notes, bundled, and packed.

5. Distribution

Once completed, the bills are sent to national banks or authorized financial institutions. From there, they’re gradually introduced into circulation through ATMs, bank branches, and retailers.


Coins


1. Design and Approval

Coin creation also starts with design. Artists sketch designs featuring national emblems, monarchs or historical figures, and symbolic images. The final version is approved by a central authority—such as the Minister of Finance in Canada.

2. Engraving and Die Creation

Once the design is finalized, it’s engraved onto a metal die. Dies are tools that stamp the image onto coin blanks. Creating these dies requires CNC (Computer Numerical Control) machining and laser engraving for precision.

3. Blanking and Annealing

Large metal rolls are punched into coin-sized discs called "blanks." These blanks are then softened through a process called annealing (heating and slowly cooling). Afterward, they’re cleaned and polished to remove residues.

4. Striking

The blanks are fed into high-speed coining presses where the engraved dies stamp the image onto both sides of the blank. Some coins also receive edge lettering or reeding (grooves) during this step. Canadian coins are struck at the Royal Canadian Mint, which is known for its innovation and quality.

5. Inspection and Packaging

After striking, coins are examined for defects. High-tech scanners and cameras look for scratches, misalignments, or cracks. Rejected coins are melted down and recycled. Approved coins are then counted, packaged, and shipped to banks for circulation.


Security Features

Currency production places heavy emphasis on security. Paper money includes visible and hidden features like:

  • Holograms

  • Colour-shifting ink

  • Transparent windows

  • Raised ink

  • UV-reactive patterns

  • Serial numbers

Coins, though harder to counterfeit due to their metal content and minting process, sometimes include electromagnetic signatures or bi-metallic construction to add another layer of protection.


Lifespan and Recycling

Banknotes and coins don’t last forever. Paper money, depending on its denomination and use, can last anywhere from 2 to 10 years, while polymer notes last much longer—often more than 15 years. Coins can circulate for decades.

Worn or damaged notes are returned to the central bank and shredded, often turned into compost or recycled plastic products. Old coins are melted down and reused in new batches.


Conclusion

The process of making currency is a careful blend of art, science, and security. From the initial design to the final inspection, each step is meticulously controlled to ensure that the money we use every day is trustworthy, durable, and difficult to forge. Whether it's the polymer bills in your wallet or the coins in your pocket, each piece of currency represents a national effort to maintain confidence in the economy.

Source: Some or all of the content was generated using an AI language model

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