Afghanistan to consider introducing polymer banknotes

The Central Bank of Afghanistan (CBA) is assessing a proposal to print plastic banknotes for the country. 

Studies by the CBA show that annually banknotes to the value of 3.3 billion AFN (US$ 47.7M) are aging and falling out of use. The issue of torn and mutilated banknotes is having significant implications for the national economy.

Apparent issues with the collection and destruction of old banknotes coupled with a shortage of new banknotes mean that existing banknotes are being used long past the point at which they should be destroyed. This causes transactional issues with banks refusing to accept badly damaged notes, despite them being issued to the public by the same banks.

A new form of currency trading has also emerged, with money exchangers unofficially buying damaged banknotes below face value in exchange for better condition Afghanis.

The CBA says, on average, the old banknotes cause harm to the national economy of over 11 billion AFN.

A life cycle assessment of polymer banknotes by the Bank of Canada found that polymer banknotes on average last 2.5 times longer than their cotton substrate equivalents. This reduces the overall number of notes required for the life cycle of the banknote issue and these notes also weighed less than their cotton substrate counterparts. At the end of their life cycle, it is possible to recycle polymer notes, as opposed to burning or burying cotton substrate notes, which will lessen the overall environmental impact of polymer banknotes notes.