This is How Money is Made, For Real!

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The alternative to not having money is bartering goods and exchanging services. In modern times, that’s hard to imagine.

Our world is now full of digital transactions, credit cards, and bitcoin. None of them feels as good as holding a hefty stack of cash in your hands, right?

Have you ever wondered how money is made? Read on to find out all about it!

The History of Money

The first paper money transaction was in China around 900 AD. It was mostly a letter detailing financial commitment. This system was quite successful, and it survived for centuries.

You might be wondering why it stopped then? The most common reason of all: recession. Money works great when large amounts of money exchange hands.

The first western banknote appeared in 17th Century Sweeden. From then on, banknote hasn’t stopped exchanging hands. The whole of Europe soon made use of the new paper system, and the U.S. followed shortly afterward.

First Things First

Money is made at the U.S Bureau of Engraving and Printing (BEP). It started in 1862 as a simple printing facility, but its complexity level increased with time.

These are the preliminary stages of printing cash. It starts with getting the required materials and deciding how the banknotes would look like.

Getting Special Paper and Ink

Every material used in making banknotes is unique. This is mainly to eliminate the chances of forging money. Every batch of paper or ink used in printing banknotes has a tracking history. It’s also highly specialized and unique to this purpose.

The paper used isn’t like our ordinary wood pulp paper, it’s actually made from cotton and linen. This is why your money survives being washed or handled extensively. The paper comes to the BEP complete with a built-in security thread and watermark.

The ink is also special. Green ink is used for the backside, while the front has a combination of black ink, metallic ink, and color-shifting ink.

Drawing a New Design

Designing money is just like designing anything else, it starts with a concept or an idea. Banknotes are required to have the following features:

  • It should contain an icon that inspires national pride
  • The concept should convey the strength of the economy
  • It should include an authentic American image
  • It should be difficult to forge and counterfeit
  • The details should be easy to engrave and print

Designing banknotes used to be all manual work with paint and brushes, but recently it all changed, and the process is mostly digital. The designers still use the traditions of classical art, so if you look closely at any bill you’ll see a huge amount of interesting details.

Okaying the Sketches

The sketches go back and forth between several senior artists, engravers, and officials. When the design is okayed technically, the design department sends it over to the Secretary of the Treasury to approve the design.

Giving the final approval for a new design is also a process. It involves assessing how far the design reflects the intended concept. The timing is also taken into consideration, and there’s an extensive amount of coordination with the Federal Reserve Bank for logistics.

Once the design is green-lighted, then the BEP starts a sequence of highly technical work to produce that new currency.

Developing the Printing Plates

The approved design is transferred to paper money by engraving it on metal plates. The engraved plates have detailed grooves, which can be filled with ink. The ink is pressed on paper sheets and this is how we get our money.

Here are more details.

Engraving the design

The banknote design contains multiple images, texts, and numbers. There are shaded areas and several contrasting tones. Imagine being tasked with copying that onto a metal plate? Some people do that for a living!

Engraving all this information on a piece of metal isn’t easy. The engravers are highly skilled artists. They still receive extensive training before this assignment and have to prove their proficiency.

The design is divided into several parts, and each artisan is assigned a certain detail. Their work styles are similar or else the individual work would stand out. It’s the responsibility of the head designer to make sure this is a zero-error system.

The sum total of all the artisans’ engravings is collected to make one final engraving. This would be used to manufacture the printing plate.

Producing a Final Plate

Producing the final plate is much more than collecting the engraved pieces. It takes successive stages of electroplating, and mold making to get a printer-ready plate.

The plate is checked for errors and only passed if it exceeds stringent quality control measures. At this point, the plate is almost defect-free and ready to print some cash.

Printing Money

This is where things get highly technical, and you start seeing the effects of factory-like machines.

Seventy-ton Presses of about 50-feet across take on the next stages. Banknote as we know it, appears at the other end of this process.

Printing the Background – Offset Printing

Monopoly banknote has designs only on one face, but our money is a much more serious business. It’s printed on both sides to make it aesthetically pleasing, but there’s another reason.

Using a background pattern and base tone makes the money harder to forge. To achieve this, a special plate is ‘burned’ with all the required details. The images are pressed first then the background tone. The press is mostly computerized and it’s capable of printing about 10,000 sheets per hour.

The sheets are checked for color defects every half-load. This is thorough but understandable considering the importance of the product. The printed sheets are placed in a secure vault for about 72 hours to dry.

Printing The images – Plate Printing

Plate printing is needed for portraits, letters, numbers, and similar shapes. These engravings are unique for each banknote, and they’re installed on the press to produce the required notes.

The engraved plates have tiny grooves representing the design. The plates are primed by filling these grooves with ink. A wiper is used to remove the excess ink, and now the presses are ready to do their magic.

The main difference between offset printing and plate printing is the number of colors used. Plate printing offers more freedom in adding colors, and that’s how we get the multicolored awesome-looking money.

The money printed this time is very close to the final form. They’re just still wet and need 72 more hours to dry.

Checking and Inspection

Errors could happen in any industrial process; that’s why quality control was created. The main sources of defects could come from handling, or they could be inherent in the paper itself.

The checking and inspection are done visually first, then a huge computer scrutinizes the printed money.

The automated system is called an Offline Currency Inspection System (OCIS). It scans all the banknotes for imperfections and discards what it doesn’t like in less than 0.3 seconds. The cameras employed work on a 4-million pixel system, so they’re seriously sensitive to defects.

Final Touches

The printed banknotes look like real money at this point. They do lack one essential ingredient though: serial numbers and seals.

These numbers give banknotes the legitimacy they need to become usable money. The final touches include trimming, labeling, and packaging the money.

Printing Serial Numbers

This stage too employs a large printing press. The machines take in large sheets of printed money. The colors normally used here are black and green ink.

This process also has an inherent inspection process. The automated system looks for further irregularities, and a whole sheet could be discarded in under 200 milliseconds.

The discarded sheets aren’t just thrown away; they have to be marked, and enter a tight security cycle until they’re disposed of properly.

Cutting and Stacking

The sheets are now real money, but they’re all connected. The cutting stage needs mechanical accuracy and efficiency.

This is achieved by passing the money sheets on a transport system, all the way to a couple of sharp guillotines.

The machine also does its best to keep the stacks of money even and neatly stacked. They’re led to a machine counter then where they get a final tally.

Packaging and Distribution

The money is organized into neat bundles, labeled, and banded. These individual packages are collected once more and banded together. The bigger items are labeled one more time, and now they’re ready for dispatch.

The bigger packages are referred to as ‘bricks’. They get unique numbers and special wrapping. The next step is making collections of four banknote bricks. They are wrapped together with special shrink-wrap.

The wrap has a specific color code and heat treatment to make it leak-tight. This produces a ‘cash-pack’.

These cash packs are then labeled and sent off to storage. The final destination is the Federal Reserve Vault, and from there the cash packs will be distributed to Federal Reserve Banks.

Other Types of Banknote

Money was traditionally made from wood pulp paper, which is the type that tears up easily. It’s the kind that’s completely destroyed if it finds its way to the washing machine. You do recall all that money you left in your pockets and completely lost to laundry!

Paper money is still used in many places, but it’s gradually phased out in favor of more durable materials. That’s why we see extravagant cotton-and-linen currencies, like the U.S. Dollars. They’re much more sturdy and reflect good quality.

Hi-Tech materials find their applications everywhere, and finally, they landed in the money-making industry. The UK currency lately adopted a polymer banknote. This starts with the 10-pound note, and the rest is scheduled to follow.

Polymer money is supposed to be hard to counterfeit. It’s also less attractive to dirt and grease. Think about all the places your money has been before it reaches your hand! That’s why polymer money is gaining popularity!

Some Parting Thoughts About Money

I read recently about ‘Money Feng Shui’, which is all about inviting more prosperity into your life. The article basically said that you need to take care of your money, and then your money takes care of you.

The article goes on to advise that you should organize your money properly. Try not to crumple them in your pockets. Keep at least one dollar in every purse or wallet. They say it’d invite more.

The idea of caring for money is generally good. Understanding how money is made certainly adds more perspective. It’s a hard and thorough process, but the highly valuable product is worth the effort.

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Hi, I'm GP. A personal finance expert with a mission to help Entirely Money readers break free of money worries. Combining a finance-focused education background (B.S. in Finance and MBA with Finance focus) with over 15 years of personal and corporate finance experience to help you achieve your financial best life!