Exchanging Old Banknotes | Hacker News Reader

Exchanging Old Banknotes

bankofengland.co.uk

35 pointsmooreds74 comments

Since we're talking about demonetization and crime and UK banknotes, I'd like to bring in the weakly related story of the https://en.wikipedia.org/wiki/Northern_Bank_robbery :

> The criminals took a total of £26.5 million: £10 million in uncirculated Northern Bank pound sterling banknotes; £5.5 million in used Northern Bank sterling notes; £4.5 million in used notes supplied by other banks; and smaller cash amounts in other currencies including euros and US dollars.

> The Northern Bank announced soon after the robbery that it would replace its £10, £20, £50 and £100 notes; the new banknotes would have different colours, new logos and altered serial numbers.[9][11] By March 2005 it had done so, meaning that the uncirculated banknotes which had been stolen would be hard to spend. This still left the £4.5 million in notes from other banks and £5.5 million in old, used Northern Bank notes, which were untraceable

Somewhere buried in a bog or at the back of a shed in Northern Ireland is slightly less than ten million pounds of unlaundered money stolen by terrorists. I wonder if it'll turn up when someone important dies.

(re: original article, I thought about it for a moment and then remembered that I'm Scottish. I don't have any Bank of England notes.)

Hmm. Do you reject the ones you're given in change? (Which would be pretty amusing in a reverse English prejudice kind of way).

I haven't tried it, but "do you have English notes? I'm going south tomorrow" ought to work anywhere in Scotland.

(But on the rare occasions I've had a Scottish note, I've not had trouble spending it in England.)

It's been a long time since I was given a banknote of any kind in change! It took me most of the past two years to even spend the ones I had in my wallet at the start of the pandemic. Nobody cares what nationality contactless payment is.

As usual, some Americans are basically lampooning this policy (although some complaints especially on data collection is legitimate and worthy of discussion), but as many pointed out the US Dollar is in the minority when it comes to perpetual acceptance. Whether perpetual acceptance or time-to-time demonetisation is the correct one is not in my ballpark, but it is common to demonetise old designs few years after the release of superseding designs.

As for the English pounds specifically, this practice is dated back to medieval times (even before the incorporation of BoE), especially to control state-sponsored (or equivalent) counterfeiting (like Nazi Germany's Operation Bernhard: https://en.wikipedia.org/wiki/Operation_Bernhard) and to replace the monarch on the banknote.

Scottish pounds are interesting though. While older designs ceased to be widely-accepted (I should note that they are never legal tender), all notes are still accepted for exchange (well until an authorised bank that printed your specific note, which currently are three*, became bankrupt).

* These are the Bank of Scotland, the Royal Bank of Scotland, and Clydesdale Bank. Despite the names of the first two banks, none of those banks are currently owned by Scottish or British governments.

Note that the comment "I should note that they are _never_ legal tender" is technically correct, but potentially misleading. Legal tender has a strict definition along the lines of "if offered in court for a resolution of a debt then, even if refused, the debt is considered paid". It's got nothing to do with "accepted by shops" which comes down to the choice of the individual vendor. There's no good reason why they shouldn't be though.

https://www.bankofengland.co.uk/knowledgebank/what-is-legal-...

The Scottish banknotes not being accepted in England was one of the most annoying things during my time in the UK (the most annoying being food quality).

I really wondered how UK banks are supposed to be world leading entities.

It's interesting that they withdraw them officially; the US has replaced its currency a number of times (the "new swelled head" 100s, 50s, 20s, etc) but the old ones continue to be accepted basically everywhere. You can even find silver certificates wandering around, though they can't be redeemed for silver anymore.

https://en.wikipedia.org/wiki/Silver_certificate_(United_Sta...

What pushes the bank of england to such an aggressive and obnoxious policy?

Is there massive, perfect counterfeiting of existing banknotes?

I think the notes don’t last that long. I kept a 10 pound note in my wallet for a few years and it got destroyed far more quickly than US dollar bills. The paper just isn’t as good. I think the notes age out quite quickly.

American "paper" money is almost a cloth, and surprisingly durable.

I didn’t actually realize that old 10 GBP paper note is now worthless except to the BoE until reading this. Sigh.

Another example of physical savings in fiat paper being demonetized away by the state.

> Another example of physical savings in fiat paper being demonetized away by the state.

This is the reason why people joke about storing money in your mattress. You aren't supposed to do it.

You aren't supposed to do it because the state can't exercise veto power over cash transactions without due process.

Cash is useful and powerful, so it benefits bankers and politicians to render stockpiles useless periodically.

Actually the reason is much simpler. The government borrows money into existence. It has to eventually pay that money back. If you keep your cash under a mattress for all eternity then those debts can't be paid back because money is not returning from the private sector to the public sector. This also true for private debt, but it is particularly comical with public debt as all the money stored under a mattress has to be replenished to maintain a sufficient amount of currency in circulation.

Imagine it as if you are the government and acting as a dairy farmer and your cows are constantly fleeing onto private land. You can't get those cows back, instead you breed new cows. Since no cows return from the private lands and there is a constant stream of escaping cows, private lands are being flooded by cows. People complain about the government printing too many cows, devaluing the value of their existing cows.

You can see, this whole scheme is just a very backwards implemented debt jubilee in an environment where an actual debt jubilee would lead to pitchforks coming from the rich.

Eg system requires rehypothication of private debt to sustain itself.

If there are 'too many' of my cows on your land, my cows magically get smaller and the size of your cows on my land get bigger.

You can see, car analogies are bad enough.

It's value is to the person accepting it. £1 notes are worth more than £1, at least the last time I looked.

As mentioned in the article, these notes can be exchanged at a bank or post office. Those out of circulation can be exchanged at the BoE.

That’s great if you are in the UK, which I am not.

How does it make a difference? Presumably they've always been near worthless where you are anyway?

But that doesn't explain why they would put an expiration date on the existing bills.

They want to know who has the cash.

Since apparently they've done it a number of times before I assume everyone's used to it, and yes, I suspect counterfeiting is the main drive.

The US hasn't felt the need to enact that measure even with things like the supposed North Korean "superdollars".

https://en.wikipedia.org/wiki/Superdollar

I think it's more to prevent you from sitting on a mountain of cash the government is unaware of. Generational money, laundering and the like. Forces you to admit to all your cash or lose it. It smells pretty evil and totalitarian to me.

It's similar to the demonization in India in 2016 where the goal was to force people to declare their piles of black money. People don't always declare things correctly for tax purposes, and black money leads to other parallel economies (terrorism, trafficking, etc). In modern times it also encourages people to switch to digital payments rather than handling cash, something which makes tracing money easier in general.

Note that it didn't end very well for India. The initial claims are conveniently forgotten and people just suffered. More than 99% of the currency got returned anyway, contradicting government's claims.

Note that I didn't comment on the outcome, only the intended purpose. I suggest reading the demonization wikipedia article for more examples if the India example doesn't satisfy you.

https://en.m.wikipedia.org/wiki/Legal_tender#Demonetization

It has little in common with the Indian situation, since the Bank of England will exchange these notes indefinitely. Other banks will usually also accept them (at least for their customers) for several years.

It's routine, it's happened to 13 notes since 1990: https://en.wikipedia.org/wiki/Bank_of_England_%C2%A320_note

It smells pretty evil and totalitarian to me to force people to wait generations until they get to work again. Imagine if we just did away with the handwaving and just wrote "ownership of this bill turns another human into your debt slave for eternity until you spend it". Maybe then it would occur to people why there is e.g. inflation rate targeting.

Inflation hurts the poor the most, or is that what you are saying?

Inflation hurts people who are least able to negotiate wage increases the best, yes. This is why it tends to be bad for the less well off. It's great for professionals with mortgages; it also tends to be great for people with hereditary wealth, since that's often tied up in land and businesses.

However this has a lot more to do with the supply of oil and gas than the number of banknotes in circulation.

There are a lot of things that might be considered totalitarian about the UK, but this isn't one of them.

Would be difficult logistically to make a comparable move

"Federal Reserve Board staff estimate that over $950 billion in U.S. dollar banknotes were held by foreigners at the end of the first quarter of 2021, roughly half of total U.S. dollar banknotes outstanding."

[0] https://www.federalreserve.gov/econres/notes/feds-notes/the-...

One of the few remaining cases where the USA is truly the best in the world. Full backward compatibility for your currency is an awesome thing.

I guess these days it's kind of an expression of strength that the US has the resources to hunt down and stop counterfeiters, and pursue them through the world's financial systems if necessary.

Meanwhile, given that the UK is reportedly bringing back imperial measures [1], they will probably do something silly like deprecate another set of existing coinage and bring back shillings.

----------------------------------------

[1] https://www.reuters.com/world/uk/britain-wants-revive-imperi...

It isn't full. If you show up with $100k of 80s-era Benjamins you will quickly realize they are not quite as fungible as you think.

Are they legal tender or not? I don't care if some picky person doesn't want to take them, that can also happen for other reasons like them not having change or such.

They are legal tender. They are not fully backward compatible.

If you show up to a store with a stack of old notes, this will look very suspicious even if they are “legal tender.”

Banks usually send old notes back to the Fed when they are found. They will notice an increase in old notes being returned and investigate as well.

So you might get away with this for a short amount of time.

Not if you consider the fact that the USA has 10x the rate of counterfeit notes: 1/4,000[0] Vs 1/40,000[1]. Obviously there are other factors too but this is likely one of the reasons for deprecating old notes like this.

[0] https://en.m.wikipedia.org/wiki/Counterfeit_United_States_cu...

[1] https://www.bankofengland.co.uk/statistics/banknote

I in no way can see pre decimalization currency returning, it was highly complex, and has been gone since the 60's. The only ones who have working knowledge of it are pensioners.

Suppose I buy 3 stone, 5 pounds, 8 ounces of tomatoes priced at 4 shillings per pound. How much do I have to pay?

Suppose I use 1 stone, 12 pounds and 10 ounces in a (large) ratatouille. What weight of tomatoes do I have left?

Nah: imperial isn't coming back. The big food market in the centre of the city sells small fruit and veg in plastic bowls 'a pound a bowl' is the tarrif and the quantity in the bowl changes according to price. Larger items (cauliflowers) are priced typically by number so 2 for £1.50 or whatever.

That's a lot of tomatoes. I'm surprised you could find enough pickers to pick them.

You might see meat and dry goods being sold in pounds, like the states does, but like, I cannot imagine going back to 240 pence to the GBP, just inflation alone.

I think that works out to 9 pounds, 10 schillings, and like 3 pence however for the tomatoes.

You can have imperial without the stone though.

Yes, I think the decimal 1p is on the way out - at least one coffee bar in town is pricing their wares to one decimal place of pounds. Let alone the old penny (1/240th of a pound).

> Why we need your personal data

> We collect your personal data to assess your banknote application (in a way that complies with applicable laws and regulations, including Anti Money Laundering regulations) and to allow us to reimburse you the face value of your banknotes. Without this data, we cannot process your application. This is necessary for the performance of a task carried out in the public interest or in the exercise of our official authority as the Central Bank of the United Kingdom.

That seems a bit of a stretch. Why use do you have for personal data when exchanging cash?

I suspect the main reason is to keep an eye on people trying to turn in counterfeit money, but the real reason is to collect as much data as possible whenever possible.

It's only mandatory when exchanging £700 or more. The use is given in the text - to comply with anti-money laundering regulations.

I visited the UK recently, and I was quite impressed by the accessibility of their banknotes compared to the US ones:

* braille on the notes

* different colors for different denominations

* different sizing for different denominations

The UK notes are far more accessible to the blind and the illiterate, and it becomes basically impossible to accidentally include a £100 note in a stack of £5s.

They also have holographic printing like the US notes, but theirs are full images embedded in transparent windows.

I know that it would be basically impossible for us to do likewise (our currency is designed to be backwards compatible, and the vending industry would probably throw a fit if you changed the size of the bill on them), but one can wish.

Keep in mind the vending industry works just fine in countries with variable sized and coloured notes, like UK, EU, AU, NZ, etc.

Oh, absolutely! I just feel like it would be a nightmare to refit new bill readers into all the existing US vending machines.

A tad offtopic, but this article is really clearly written and looks really good, same with healthcare.gov and the Ohio BMV's site https://bmv.ohio.gov/ .

Am I strange for enjoying modern government website design?

I think that these sited are clean and easy to navigate, which is far better than most other government sites.

It really is a breath of fresh air

Nope! It's actually exciting to see a government site not just being modern but also accessible, however thinking about it the UK government has a full-time staff thinking about this (called GDS/Government Digital Service).

Uhh sept 2022 last month to use paper pounds?!

What about people abroad who only visit England every few years and have some paper notes on them still?

> What about people abroad who only visit England every few years and have some paper notes on them still?

One, this is far from a forefront constituency for the Bank of England. Two, the BoE (in fact, most countries) have a long history of replacing notes [1]. This is expected behavior. Three, I think the BoE will keep exchanging notes that are no longer legal tender indefinitely; this is just for their transactional use and exchangeability at a bank.

[1] https://www.bankofengland.co.uk/banknotes/withdrawn-banknote...

The article explains how to redeem them by mail. The form is here:

https://www.bankofengland.co.uk/-/media/boe/files/banknotes/...

It includes instructions for people outside the UK.

> It includes instructions for people outside the UK.

wow thanks, that's good to know.

The Royal Mail and other postal services normally tell you not to send cash through the mail, because their employees may steal it.

You can spend them anywhere other than the bank.

Places will stop accepting them, they don't want the burden of sending them to the BoE to be replaced either.

In most countries this is pretty normal. I don’t use more than $50 usd equivalent of cash in a year and haven’t got the last 10 or so. But if there is a major crisis where payment systems don’t work I still want to keep cash on hand. I have to rotate the cash in that little emergency stash every few years just like I rotate the cans of food for one week I keep there.

I have had large denomination bank notes given to me for birthdays become non legal many times over the year. Luckily you can exchange them at the central bank for many years after they stop being usable in stores.

The concept of money just working for 20 years or so, and the knowledge that a bill put in a drawer risks being unusable without exchanging in the central bank in just a few years and completely worthless some years after that, is entirely natural to me.

Then you have an excuse to visit the BoE, which has a very nice museum which is worth seeing anyway.

A recent family emergency had me racing to Wal-Mart to get lacking urgent medicine. I had forgotten my wallet so I retrieved my "emergency C note" [an old US $100 Federal Note, kept in the glovebox, exactly for such purposes]... and the Pharmacist treated me like a criminal!!

She just could not understand why "somebody would be in such a rush to have forgotten their wallet and only have this old hundred dollar bill in their possession" — meanwhile, my god-mother is at home convulsing in her lack of L-DOPA.

Added more delay than my entire commute there and back! Ultimately they realized my situation and an assistant store manager "APPROVED" my old bill.

Sweden has the same policy, but with rather strict requirements to prove that it's not from criminal activity, if it's a large amount.

There are many horror stories with old people having lost their stashes of hoarded cash, because they didn't keep any documentation on their sources.

People had 15 months (for £50 notes) and 2½ years (for £20 notes) to spend or deposit these notes, or longer when you consider the time since the new notes were first announced.

As well as the Bank of England, most banks will accept old notes from their customers.

Easiest reference: https://www.thesun.co.uk/money/8662482/old-notes-circulation...

The limits really are pretty low...

Is the UK government really worried about someone with a fake ID converting £800 of old cash to new cash?

Anyone with £800 in cash seems pretty suspicious to me. How do you even get that?

I have £100 in cash because an old person who doesn't internet bank paid me back their half of a couple of meals out, and I don't know what I'm going to do with it. It'll last me over a year.

This is a fairly wild idea, but you could spend the cash on goods and services.

Two trips to a restaurant should do it.

(But I keep a similar amount at home, just in case of emergency.)

I could do that, but it's a hassle compared to just waving your phone at a terminal. Cash is increasingly an inconvenience.

Interesting that the Bank of England actually has a counter in their building in the City of London where you can exchange old notes.

It’s quite small and is (or was a few years ago when I last visited) also used as a waiting area for visitors to the Bank.

IIRC you can only have a personal account if you are a Bank of England employee.

This has Demonetisation vibes about it

https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetis...

I miss the old £1 banknotes. They were much lighter than the pound coins that replaced them.

I do like the newer bank notes, being made of polymer they last much longer and are easier to clean.

The war on cash boils the frog slowly.

Soon you won't able to have savings in cash at all.

No wonder people are excited about crypto.

relevant patio11 anecdote about this

https://twitter.com/patio11/status/1536292255983898624

Reply on news.ycombinator.com