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Crane CEO Talks Foreign Expansion And Future Of Paper Currency

Money in pant's pocket
Flickr/Mike Schmid

Boston-based Crane Currency announced plans Wednesday to open a banknote printing and customer experience center in the Mediterranean country of Malta. WAMC spoke with the company’s CEO about the announcement and the state of global paper currency.The 140,000-square foot facility represents a $100 million investment for construction and equipment. Crane Currency expects to hire 200 employees to work at the center when it’s completed in early 2018. CEO Stephen DeFalco says the company works with more than 50 central banks.

“For many of these banks we do finished bank notes where we design the bank note and then ship them a completed bank note,” DeFalco said. “That business has growing nicely for us over the past couple of years and this adds to our capacity.”

DeFalco says the move does not mean any other Crane Currency facilities will close. He says the new center will also continue to grow the company’s security technologies operation in New Hampshire.  DeFalco explained exactly what will happen inside the new Malta plant.

“In one door will come specialized banknote paper that’s made in our Swedish facility that’s 100 percent cotton paper usually with a number of embedded security features and watermarks in it for the customer,” DeFalco said. “That will come into the loading dock. It will pass through about five different printing processes for offset printing, screen printing, varnished, numbering and then cutting and packing. Then will be shipped out to central banks all over the world.” 

Crane Currency has been a global producer of currency products for more than 200 years and has been the sole supplier of U.S. currency paper since 1964. In 2013, Crane Currency produced less than 500 million international banknotes. In fiscal 2016, it produced about 3 billion. Since the company helps design bank notes for so many central banks, DeFalco detailed the complexity of keeping each note secure.

“A modern banknote today is about 15 different layers with multiple layers of security in it,” he said. “No central bank would have the same exact sets of combinations nor down to printed icons or color layers. So they’re designed to be distinctive and recognized, but also unique and that’s both in the public features and the forensic features built into the banknote.”

With the increasing capabilities of technology in the electronic currency realm, DeFalco says there are a lot of myths about reducing paper currency.

“Currency in the U.S. continues to grow at about 4 or 5 percent a year,” DeFalco said. “Most people believe that due to electronic transactions, currency is on a decline. That’s not the case at all. It’s growing in just about every country in the world. Particularly for us, in the emerging markets like Africa and South America we see very, very high growth rates. I think electronic payments and currency will coexist certainly for the foreseeable next sets of generations.”

There have been calls in the U.S. and other countries to do away with smaller paper bills in favor of coins. DeFalco says there is no substantial economic impetus to do so.

“The U.S. one-dollar bill lasts over 60 months in circulation,” DeFalco said. “That banknote cost the Bureau of Engraving and Printing about 4 cents to make. So you get an enormous number of use and transactions for 4 cents. Replacing that with a coin would be probably five to eight times that, plus for every dollar you take out of circulation you have to put 1.7 coins into circulation because they don’t have the same velocity. They find themselves in ashtrays, pockets and jars on desks. You don’t see that happening with banknotes.”

DeFalco added that 90 percent of consumers prefer paper bills. In 2015 Crane Currency announced a split with what is now Crane Stationery based in North Adams.

Jim is WAMC’s Assistant News Director and hosts WAMC's flagship news programs: Midday Magazine, Northeast Report and Northeast Report Late Edition. Email: jlevulis@wamc.org
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