What is Money Made of (US Dollars, Pound Sterlings, Euro…)

what is money made of

We spend so much time thinking about money, yet, not so many people know what exactly money is made from. In this article, I’m covering what major currencies are made of, the banknotes and the coins, as there are stark differences between countries. 

But first, here’s the short version:

  • US money is made of a blend of 75% cotton and 25% linen
  • In the UK, new notes are printed on polymer – a thin, flexible plastic
  • EU’s banknotes are printed on pure cotton paper
  • Australian banknotes are printed on polymer
  • Banknotes of the Canadian dollar are also printed on polymer
  • Japanese banknotes are made from mitsumata, abaca pulp, and other fibers
  • Indian currency is made from 100% cotton

What is US Money Made of?

us dollars

Today’s US banknotes are made of a combination of 25% linen and 75% cotton. On the flip side, today’s US coins are made of copper, nickel, and zinc. 

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A coin isn’t made just of one type of metal. Instead, they’re made of multiple types of metal that are pressed together into layers. Every type of coin is different in size, and it’s worth knowing that the sizes and metals used don’t correlate to the value of the coin.

For instance, both a penny and a nickel are bigger than a dime but are worth less. 

Amazingly, the US government didn’t even issue money as late as the early 1860s. Each bank in the US could print its own banknotes up until then, which created thousands of versions – some of them incredibly beautiful and elaborate with stunning portraits, scenery, and even allegorical images. 

However, because there was no central oversight, banknotes varied in shape, size, color, and design. On each note, around five artists worked for months to make unique notes that would hinder counterfeiting. 

By 1860, there were incredible 7,000 notes in circulation from more than 1,500 banks.

Therefore, in 1862, the federal government decided to step in and start printing money that will be uniform. 

How Much Does it Cost to Produce US Currency and Coins?

DenominationPrinting costs in cents
$17.5/note
$27.5/note
$512.7/note
$1012.4/note
$2013.8/note
$5013.3/note
$10017.0/note

In 2022, the currency operating budget is around $1 billion. The $1 and $2 notes are the cheapest to print and stand at 7.5 cents per note. The $5 and $10 notes are around 12.5 cents per note, $20 at 13.8 cents, $50 is a bit cheaper at $13.3 cents, and the $100 note is the most expensive at 17 cents per note. 

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How Long is the Lifespan of US Paper Money?

DenominationLifespan in years
$16.6
$54.7
$105.3
$207.8
$5012.2
$10022.9
Estimated lifespans of various US notes

The banknote lifespans vary greatly and depend on how often the notes are used. The $100 note that is used the least has the longest estimated lifespan, which stands at almost 23 years. 

The $5 notes are used most often and thus have the shortest lifespan at 4.7 years, similar to $10 bills’ 5.3 years. 

Do You Have to Trade in Old-Design US Notes When New Ones Begin Circulating?

In the US, old-design notes don’t have to be traded in for new ones. All US currency stays legal tender, regardless of when it was issued. 

In other countries, it might be a different story. For instance, in the UK, the old paper £20 and £50 notes stopped being accepted as currency at the end of September 2022 and could only be exchanged at the Bank of England for the new polymer ones. 

Can Businesses Refuse Cash as a Form of Payment in the US?

A private business, a person, or an organization may or may not accept currency or coins as payment for goods or services. Private businesses are also free to create their own policies on cash acceptance unless there is a state law that says otherwise.

What is UK Money Made of?

pound sterling

All UK’s banknotes are made of polymer today. The new £5 banknote was released in 2016, the £10 note in 2017, the £20 note in 2020, and the £50 in June 2021.

Polymer notes are water-resistant, dirtproof, hard to counterfeit, have a long lifespan, and are recyclable. 

You can already see why the UK government decided to switch to polymer and move away from paper notes. The new banknotes are expected to last 2.5 times longer. That doesn’t mean they’re indestructible, far from it. 

Because new banknotes last longer, they’re more environmentally friendly, and their footprint is 16% lower than paper banknotes. This does sound a bit counterintuitive due to them being made of plastic. 

On the other side, UK coins are made of copper, nickel, zinc, and iron, and the three main alloys used in coin manufacturing are:

  • Nickel-brass (mainly copper, with zinc and nickel)
  • Copper-nickel (mainly copper, with nickel) 
  • Bronze (mainly copper, with zinc and tin)
  • Steel (iron with small amounts of carbon)

As you can see, copper is the main metal used. It was cheap (until recently) and has antimicrobial characteristics. However, because it’s used in so many things these days, its price has gone up considerably, and some coins are worth more in raw material than in monetary terms.

For that reason, 1p and 2p coins are now made of copper-plated steel. Before 1992, they were made of 97% copper. 

Similarly, 5p and 10p coins are now made from nickel-plated steel and not copper-nickel. The iron content in the steel core is also what makes the new coins magnetic.

The new 1£ coin that was introduced in 2017 is made of nickel-plated brass alloy on the inner part and nickel-brass on the outer part. The new 1£ coin was brought out to combat counterfeiters. 

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Incredibly, 1 in 30 1£ old coins was counterfeit!

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What is EU Money Made of?

euro currency

The euro banknotes, which represent the currency of most European Union members, were issued in 2002 by the national central banks or the European Central Bank (ECB).

Unlike euro coins, the note design is the same across the Eurozone, although they are issued and printed in various member states.  

The euro notes are made from pure cotton fiber that gives them their distinctive feel and durability. In 2021, there were approximately 27.640 billion banknotes in circulation, with a total value of around €1.519 trillion.

The banknotes have very different lifespans. For instance, the estimated lifespan of a €5 note is less than a year, and on the other side, the now defunct €500 note had a 30-year lifespan. 

Euro coins are made of alloys, just like most coins in the world. Here’s the composition of euro coins:

  • 1c, 2c, and 5c are made of copper-coated steel  
  • 10c, 20c, and 50c coins are made from Nordic gold (89% copper, 5% aluminum, 5% zinc, 1% tin)
  • €1 and €2 coins are two-toned
    • The “gold” part is an alloy (75% copper, 20% zinc and 5% nickel) 
    • The “silver” part is copper-nickel (75% copper and 25% nickel)

What is Australian Money Made of?

Australian dollars were first issued by the Reserve Bank of Australia in 1966 when the country changed to decimal currency and substituted the pound with the dollar.

Australian banknotes are printed on polymer, which is a type of durable plastic. They can be easily distinguished from their paper-printed counterfeits because scrunched-up polymer notes return back to their original shape and are much more difficult to tear. 

Australia was the first country to introduce polymer banknotes in 1988. Since then, other countries such as Canada, Romania, New Zealand, Brunei, the UK, and Vietnam have adopted them as well. 

In total, more than 20 countries have made the switch to polymer already.

The country’s coins were also introduced in 1966. The 1c and 2c coins were made of a composition of 97% copper, 2.5% zinc, and 0.5% tin. They are no longer used since 1991. 

The 5c, 10c, 20c, and 50c coins are made of copper-nickel – an alloy that consists of 75% copper and 25% nickel. 

And lastly, the $1 and $2 coins are made of 92% copper, 6% aluminum, and 2% nickel. 

What is Canadian Money Made of?

canadian dollars

Canada, just like Australia and the UK, makes all its banknotes from polymer – a smooth and durable plastic film. 

The first series of notes were issued in 1935 by the Bank of Canada. Since then, the Canadian Bank Note Company was contracted to issue all other series. 

All of Canada’s notes were printed on paper comprised of pure cotton. Polymer started replacing cotton starting in 2011, with the last paper notes being made available in November 2013.

That means that the current series of Canada’s polymer banknotes were introduced between 2011 and 2013.

Regarding Canadian coins, since 2000, coins below $1 were changed to steel with copper or nickel plating. And from 2012, that extended to all coins. 

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What is Japanese Money Made of?

japanese yen

Banknotes of Japan are made from mitsumata (Edgeworthia papyrifera or Oriental paperbush), abaca pulp, and other fibers.

If you aren’t familiar with mitsumata, it’s a common name for Edgeworthia chrysantha or Oriental paperbush as it’s also known. Since ancient times, mitsumata was used to produce the famed Japanese paper washi

oriental paperbush

The first modern banknotes were released in 1885 by the Bank of Japan.

On the other side, Japanese coins are made of: 

  • Aluminum (¥1), 
  • 60-70% copper and 30-40% zinc (¥5) 
  • 95% copper, 3-4% zinc, 1-2% tin (¥10)
  • Copper-nickel (¥50, ¥100, ¥500 (1982 issue))
  • Nickel-brass (¥500 (2000 and 2021 issues))

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What is Indian Money Made of? 

indian rupee

India is one of the countries that still use 100% cotton for its banknotes. Cotton is very durable and much more long-lasting than simple paper. 

Cotton is also further modified by applying a special coating to make it dirt and moisture-repellent. 

Even though cotton is a good choice for banknotes, polymer is an even better one, so it’s no surprise that there have been talks about changing the material of banknotes for more than 20 years now. 

However, nothing came to fruition yet, and the country is continuing to use cotton-based notes. 

All of India’s new coins are made of ferritic stainless steel. The old ones were made from copper-nickel). Here’s what each coin type is made of:

  • Ten Paise (0.10) – Ferritic Stainless Steel
  • Twenty Five Paise (0.25) – Ferritic Stainless Steel
  • Fifty Paise (0.50) – Ferritic Stainless Steel
  • One Rupee Coin – Ferritic Stainless Steel
  • Two Rupee Coins (Old) – Copper-Nickel
  • Two Rupee Coins (New) – Ferritic Stainless Steel
  • Five Rupee Coins (Old) – Copper-Nickel
  • Five Rupee Coins (New) – Ferritic Stainless Steel

10,000 rupee was the highest denomination banknote ever printed in India. It was first issued in 1938 and was demonetized in 1946. That demonetization only lasted until 1954 when the ₹10,000 was introduced again. The new ₹10,000 banknotes were again demonetized in 1978.

15 languages appear on Indian banknotes in addition to Hindi being notably displayed in the middle of the note and English on the backside of the note.

Conclusion

World’s money is mostly made of cotton, polymer, or regional materials such as mitsumata. Although cotton-based banknotes are durable and last 4+ years, there are undeniably better materials that can be used.

One such material is polymer that major economies such as the United Kingdom, Canada, and its pioneer, Australia are now using to print their money on. 

Polymer is generally more durable, cleaner, and much more tear-resistant. Although polymer notes are initially more expensive to produce, they make up for it in the fact that they last around two and a half times longer than cotton-based notes. 

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