Circulation of euro banknotes
From the moment they are manufactured from bales of cotton right up to their destruction by the central bank, banknotes follow a specific path through the economy: they are transported, distributed via ATMs, used to pay merchants, collected, sorted and – if not too worn - recirculated. Banknotes that are no longer fit for circulation are replaced with new ones. The average lifespan of a banknote is 3 years.
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The banknote life cycle in 2020
Euro banknotes are made of cotton and are manufactured at printing works located in the euro area. They are transported to the Banque de France for storage before being put into circulation. Commercial banks order the quantity of banknotes they need and collect them from Banque de France branches using cash-in-transit firms. They then distribute the notes to the general public either via their own branches or via automated teller machines (ATMs). Once in the customer’s wallet, banknotes are used day-to-day to purchase goods and services from retailers. The retailers in turn deposit the banknotes at their local bank branch, which sends them back to the Banque de France (via a cash-in-transit firm) to be sorted and put back into circulation.
The legal framework for external recycling has been strengthened.The Governing Council of the ECB adopted on 16 September 2010 the guideline "on the authenticity and fitness checking and recirculation of euro banknotes" (ECB/2010/14) which replaced the above-mentioned framework. This decision was made pursuant to the amendment to Article 6 of European Regulation 1338/2001 on "measures to be taken for the protection of the euro and the prevention of counterfeiting".Decision No. 2011-02, dated 7 September 2011, of the Governor of the Banque de France specifies the national implementation arrangements.The principles governing recycling by private operators remain unchanged:-Credit institutions wishing to supply their self-service ATMs with banknotes not originating from a Eurosystem central bank must sign an agreement with the Banque de France or use a service provider that has itself signed an agreement;-The agreements stipulate that the banknotes must be processed using equipment that has been positively tested by a Eurosystem central bank;-The institutions signing the agreements must adopt operating and internal control procedures and accept to be supervised by the Banque de France;-The exception concerning isolated branches persists.
The length of the banknote cycle and average lifespan of a banknote
On average, a banknote will find its way back to a euro area central bank counter every 11.7 months.
With the switch to euro banknotes and coins in January 2002, calculating the length of the banknote cycle and lifespan of notes at national level became irrelevant due to the migration of banknotes between different euro area countries.
Euro area banknotes last for an average of eight years, but individual lifespans vary widely depending on the denomination, from around 5.5 years for the €10 note, and up to more than 13 years for the €500 denomination. The €100, €200 and €500 last longer and are more resistant to wear and tear as they tend to be used more for hoarding purposes. The new Europa series of banknotes is designed to be longer-lasting than the previous series, as well as having enhanced security features to prevent counterfeiting. The new notes are being rolled out gradually over a number of years, and four denominations have already made their way into consumer’s wallets: the €5 (2 May 2013), the €10 (23 September 2014), the €20 (25 November 2015) and, most recently the €50 (4 April 2017).
Destruction and replacement of worn-out banknotes
Banknotes that have become too worn and dirty to be recirculated are destroyed by the Banque de France – the Bank is the only body authorised to do this in France. Unfit banknotes are replaced with new ones, which are distributed to commercial banks as part of their regular orders.
The European Central Bank (ECB) works closely with the euro area national central banks to ensure the banknotes in circulation are of the highest possible quality. Your feedback is important in helping us meet this target. Please take a few minutes to complete our online survey on the condition of the euro banknotes you use day-to-day. The results will help us to determine your needs and level of satisfaction when it comes to banknote quality.
Updated on: 04/27/2021 12:50