Demonetizing notes in the UK

[WavyTwenty]

In the UK, the paper £20 note with economist Adam Smith and the old £50 note portraying entrepreneur Matthew Boulton and the engineer James Watt, will be demonetized on Sept. 30, 2022

They will be all polymer after this point in time.  Even we didn't demonetize any of our decimal notes, interesting that they did this. Maybe counterfeiting is a real problem for them.

[redlock]

Is ''demonetize'' is correct word? The paper notes are being withdrawn.
The old paper notes can still be exchanged at the Bank of England after September 30th.
See:
https://www.bankofengland.co.uk/banknotes/exchanging-old-banknotes

[gweidion]

Very few countries actually demonetise any of their currency. Usually because it leads to distrust of the currency and distrust leads to collapse. If you can't trust the currency you won't want to hold the currency. Unless of course you are a banknote collector in which case it doesn't matter.
It happened in PNG, they demonetised their paper currency from 2014 if I recall correctly.  
Hyper inflation kills fiat currency too.

The only "sensible" country I know of that demonetised any of it's currency was New Zealand who demonitised their 5 cent piece in an effort to get as many back as they could to melt them down.

[Sapyx]

The Bank of England has never revoked or cancelled its "promise to pay the bearer on demand" for any of the notes it has ever issued. If you go into the Bank offices and request to exchange or redeem your old notes, whether they be from 1960 or 1660, they will do so, once they are convinced the notes are genuine.

But the Bank of England does have a process of "demonetization", meaning old, obsolete notes are no longer legal tender. In other words, attempting to pay a debt with one would no longer be considered a legally binding attempt to pay the debt. Also, they are no longer re-issued by the banks upon receipt. Or in other-other words, while the Bank may still consider them to be money, the British parliament (which gets to decide what is legal tender, and what isn't) does not.

In Australia, we don't "demonetize" notes, in the sense that our notes remain legal tender after being withdrawn. Every note ever issued by the Commonwealth Bank and by the Reserve Bank is still legal tender. However, we do do that second part of the process: withdrawing and not re-issuing.

[Sapyx]

Very few countries actually demonetise any of their currency. Usually because it leads to distrust of the currency and distrust leads to collapse. If you can't trust the currency you won't want to hold the currency. Unless of course you are a banknote collector in which case it doesn't matter.
It happened in PNG, they demonetised their paper currency from 2014 if I recall correctly.  
Hyper inflation kills fiat currency too.


The only "sensible" country I know of that demonetised any of it's currency was New Zealand who demonitised their 5 cent piece in an effort to get as many back as they could to melt them down.

Switzerland is one country that routinely demonetizes its notes - after 20 years following the official withdrawal date of a note, all notes issued by Switzerland are not only not legal tender, they are not redeemable - meaning they have zero face value and are effectively worthless except as collectables. This has the effect of forcing everybody to use the Swiss banking system, rather than hide cash under the proverbial mattress. Though in 2020, they made an exception for the series of notes from the 1970s, withdrawn in 2000 and which should have become worthless in 2020; these now have an "unlimited" redemption time.

The Swiss franc doesn't seem to suffer much from this feature, primarily because it is the Swiss banks, rather than the Swiss physical currency, that people all over the world put their faith in. Nor does this complete lack of face value seem to deter people from collecting older Swiss notes, even paying over full face value for them.

[nealeffendi]

@Sapyx, if the Swiss notes still have 20 years to redeem after withdrawal then it wouldn't be hard to mattress stuff them and slowly (20 years) to convert them outside the banking system. Also sensible people no longer fully trust the Swiss banks these days as their old policy of discretion is history and they blab to the IRS and others.

[WavyTwenty]

Is ''demonetize'' is correct word? The paper notes are being withdrawn.
The old paper notes can still be exchanged at the Bank of England after September 30th.
See:
https://www.bankofengland.co.uk/banknotes/exchanging-old-banknotes

Yes, you are correct.  And I agree, it is a pretty harsh word.

I suppose that you could say that Australian Pounds and Pence are not demonetized as they can be taken into the bank to be changed for decimal currency. Unlike the Holy Dollar and Dumps that they bank wont exchange for decimal currency.

I think I found it interesting that they didn't say they are being replaced, but rather are not accepted at retail shops and only can be swapped by banks.  I would think/hope that the banks wouldn't get caught out with counterfeit ones.

[JeffH]

I suppose that you could say that Australian Pounds and Pence are not demonetized as they can be taken into the bank to be changed for decimal currency. Unlike the Holy Dollar and Dumps that they bank wont exchange for decimal currency.

My (ex)bank teller wife says she will happily change holey dollars and dumps at face value -even a bit more than face value if you ask nicely and, if you post them to her, she will cover the postage cost. Her offer extends to any Spanish dollar, centre punched or not as well as the dumps/plugs.

Holey dollar

The tellers at our local bank branch always keep any round 50¢ and pre-decimal silver coins that come across the counter and put the face value in decimal currency into the coin/note drawer.

[gweidion]

The tellers at our local bank branch always keep any round 50¢ and pre-decimal silver coins that come across the counter and put the face value in decimal currency into the coin/note drawer.

That's the reason why I would have still liked to work at the bank. That and watching your interest accumulate daily.

[JeffH]

The interest accumulation on my savings account last month was a princely 13¢ -average daily accumulation 0.433............¢!

[gweidion]

The interest accumulation on my savings account last month was a princely 13¢ -average daily accumulation 0.433............¢!

Thirteen cents... wow, lifestyles of the rich and famous.

[JeffH]

You must be confusing me with someone else. I am neither rich or famous.

[brismike]

I exchanged £480 in paper UK 20 pound notes in the Post Office at Crossgates in Leeds on 10/10/2022 for new polymer notes. No problem at all.

Mike

[redlock]

I exchanged £480 in paper UK 20 pound notes in the Post Office at Crossgates in Leeds on 10/10/2022 for new polymer notes.

May I ask which denominations you got or asked for? £10, £20, £50?

[brismike]

I exchanged like for like. They were all £20's.

Mike