This article is from the WeChat public account: Positive Solution Bureau (ID: zhengjieclub) , Photo by Annie Spratt on Unsplash
Speaking of which you may not believe, the world’s largest banknote printing plant may be going bankrupt.
Russian TV today reported on December 8 that the United Kingdom’s largest printing bank, Delaro, has issued a warning of possible bankruptcy.
As early as a week ago, the BBC reported that Dellaru had a loss in the first half of its fiscal year. If the restructuring plan fails, it will face the risk of failure.
Flowing banknotes, iron stamp printing plant.
Why is the bank note printing plant that seems to be in good business on the verge of bankruptcy?
I. Centennial Banknote Printing Factory
In 1813, a 20-year-old Britishman, Thomas De La Roue, founded De La Rou with a printer in his hand.
In the beginning, Dellaru only sold small books, printed newspapers and playing cards.
(Thomas Dellaru)
1855, GermanyLalu’s business began to upgrade, stamping the UK. Five years later, he started a big business, printing money for the Bank of England.
It is common sense that banknotes are so valuable that they should be printed by domestic companies. However, in fact, except for a few countries such as China, the United Kingdom, and the United States, printing money overseas is a common practice. Many countries do n’t even have their own mints. This provides market opportunities for specialized banknote printing plants.
For example, the Solomon Islands, with a population of only 600,000 in the Pacific Ocean, as well as the currency design and printing of the Republic of Macedonia, Bozwana and other countries, have been contracted to Dellaru.
(notes for printing money)
Deraru, which has been printing banknotes for more than 100 years, has grown bigger and bigger, printing banknotes for more than 140 countries. It is said that De La Rou’s weekly banknotes are stacked and are twice as high as the peak of Mount Everest.
It is worth mentioning that Dellaru has a deep relationship with China.
In 1931, De La Rou printed a 5-yuan note for the Bank of China under the Republic of China, which was limited to Tianjin.
Before 1948, Dellaru often printed various versions and denominations of the Republic of China’s legal currency and Hong Kong dollar for the Government of the Republic of China and the British Hong Kong Colonial Government.
Currency)
Since the 1950s, Dellaru printed Hong Kong dollars for Standard Chartered Bank and HSBC, until Hong Kong returned to the People’s Republic of China in 1997.
Bills are considered to be the strongest anti-counterfeiting prints in the world. Now that banknotes can be printed, nothing else is of any concern.
Since 2012, with the accumulation in the field of anti-counterfeiting, Dellaru has started printing passports for the United Kingdom.
(News Article)
In 2008, De La Rou annexed the world-famous stamp factory, the British Ward Road Company, and became the world’s largest banknote printing company.
Second, why is it on the verge of bankruptcy?
With technology, credibility, and market, and printed indispensable banknotes, how could Delaru be on the verge of bankruptcy?
First, printing money is costly.
Printing money is not easy. Since the day money was born, it has struggled with counterfeit currency. In order to deal with counterfeit currency, De La Rou needs to invest a lot of money every year to upgrade technology, and the banknotes produced are becoming more and more complicated, which of course requires costs.
Second, there is a limit on the demand for banknotes.
There is a paragraph that said that the printing press most expected three things to happen: the skyrocketing prices, the replacement of the head of state, and the birth of a new country.
Because of these three things, the demand for banknotes will increase greatly. From the data point of view, the amount of cash in global circulation is still increasing, but this growth is obviously capped, which also determines the growth boundary of Delaru.
(Deraru)
Again, competition from other banknote printing factories.
The competition in the banknote printing industry is quite fierce. In addition to the state-owned banknote printing plant, Dellaru also has to cope with competition from small banknote printing plants in countries such as Germany’s Gizek-Deflint, France’s Obert and Russia.
In recent years, German and French counterparts have expanded production, which has led to overcapacity in the industry, which has led to competition to reduce prices. Dellaru can only maintain operating profit by cutting fixed costs and squeezing suppliers.
The biggest shock came from electronic payments.
Data show that between 2008 and 2012, global cash transactions amounted to US $ 11.6 trillion, an increase of only 1.75%. In the same period, the amount of non-traditional payment methods increased by nearly 14%.
Some countries have started a “cashless” campaign. Starting in 2014, the Danish Central Bank decided to stop printing banknotes and replaced them with electronic payments. The Bank of Korea announced that it will accelerate its efforts to reduce the circulation of coins, with the goal of completely removing coins from circulation by 2020.
(News Article)
In China, mobile payment has already become an irresistible trend and has even affected the payment habits of overseas merchants.
《China’s mobile payment environment in 2018According to the White Paper on Development and Trends of Overseas Tourism Markets, in 2018, outbound tourists using mobile payments accounted for 32% of the total transaction value, exceeding cash payments (30%) for the first time, and only 6% with the most mainstream bank card payments. gap.
(Payment methods for Chinese outbound tourists in 2018)
The rapid change in payment habits is obvious to banknote printing companies. In the latest semi-annual report, the revenue of Delaru’s main business, banknote printing, fell by 29.5%, which directly caused the company’s net profit in the first half of the year to drop by 87.1%.
(Delaru Company Financial Report)
The woe is not alone. Two years ago, a £ 400 million British passport printing contract was snatched by a French competitor, which became the last straw that crushed De La Rou.
Three times, it is not needed
If cost pressures, competitors, and electronic payments are just beating and kicking banknote printers, then digital currencies have taken a fatal blow.
Human beings have come from ancient times. Currency has been born with the commodity economy. It has continuously evolved and evolved, witnessing the vicissitudes of society.
From barter, metal money to gold and silver, paper money … money is getting more and moreMoving towards the symbol.
The function of currency is to act as a general equivalent for commodity transactions, which does not necessarily have to be valuable, nor necessarily physical.
This is the fundamental reason why digital currency can replace banknotes.
The virtual cryptocurrency Libra coin published by Facebook (Libra) , it is not because it is impractical, it is precisely because Because it is feasible.
Digital currencies are not far from us.
As early as February 2017, the Blockchain-based digital bill trading platform promoted by the People’s Bank of China was successfully tested. The legal digital currency issued by the Central Bank has been tested on the platform. .
If all goes well, the People’s Bank of China is likely to be the first central bank to issue digital currencies and launch real applications.
Once the digital currency is issued and popularized, the banknote printing factory will have a skill, but it will be useless.
A few years later, maybe we can only see banknotes and money printing machines in the museum and see this sentence:
Unfortunately, it doesn’t do anything wrong, it just doesn’t need it anymore.
This article is from the WeChat public account: Zhengjie Bureau (ID: zhengjieclub)