In a significant move, the European Central Bank (ECB) has outsourced production of all 10 euro banknotes for the euro zone to Spain in 2024.
The decision was announced recently and identified the Banque de España and the Madrid-based public company IMBISA as the main players in the production.
Significant production allocation
The ECB’s mandate stipulates the issuance of approximately 424.2 million 10 euro banknotes, a mandate that demonstrates Spain’s prominent role in the euro area’s financial ecosystem.
In addition, Spain has been tasked with producing some of the €5 banknotes needed next year, further underscoring Spain’s important manufacturing role.
This strategic move reflects each country’s contribution to the ECB’s capital and is consistent with the ECB’s broader objective of efficiently distributing the production of money among member states.
How is production determined?
Determining the number of banknotes to be issued each year requires great care. The euro area’s central bank will initially estimate the amount of banknotes that will need to be replaced due to wear and tear, along with the demand for new currency.
The ECB then integrates these numbers with its own forecasts to establish comprehensive requirements for the entire zone.
The allocation of production work to national banks is influenced by the share of national banks in the ECB’s capital, with the Bank of Spain ranking fourth after Germany, France and Italy.
Determine the allocation based on efficiency and cost considerations, ensuring that each entity is periodically responsible for a different face value.
responsibility to replace
The ECB’s strategy avoids assigning the same denomination to any central bank consecutively. This approach ensures diverse and balanced production responsibilities across the euro area.
Reflecting its previous mandate, the Bank of Spain will be involved in the production of a 50 euro banknote in 2022 and 2023, and will contribute to the production of a 5 and 50 euro banknote in 2025.
This circular system not only promotes efficiency but also emphasizes the collaborative nature of the euro area’s money production mechanism.
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