When printing cash on paper is your main activity, hyperinflation is your friend and virtual transactions are your worst enemy. How Giesecke – Devrient, Germany, has learned to thrive in a world of low-inflation electronic payments.
If there was ever a company with dark clouds on the horizon, it would have to print cash on paper, in a different way known as banknotes. In the United States, banknote production is a duty of the U.S. Treasury Printing and Printing Office, however, for much of the rest of the world, from Armenia and Peru to Thailand and Swaziland, the cash is published through a handful of companies. dominant among them, Munich, Giesecke – Devrient in Germany.
Last month, the 168-year-old printing press made its first investment in blockchain, leading a $17 million A-series in Metaco, a Swiss startup that offers childcare for Bitcoin and Stablecoins, a new type of cryptocurrency driven through blockchain but subsidized through fiat currencies such as the US dollar. Perhaps most importantly, it would be a better complement to the new software it introduced in 2019, called Filia, which allows central banks to use the generation of distributed ledgers to factor virtual versions of their own currency.
Six of G-D’s central bank customers are already negotiating to use Filia to create their own virtual central bank (CBDC) currency, as China prepares to be the first country to launch its own blockchain-based currency. According to CEO Ralf Wintergerst, the cash creation business is on the brink of a technological revolution that fuses the most productive of the global physical with the most productive of the virtual.
Giesecke – Devrient is still deeply rooted in the paper cash industry, however, it would be hard for you to find a more enthusiastic advocate for virtual payments. The pandemic caused by Covid-19, and the inherent threat to handling cash on paper, has accelerated cashless trends in evolved countries such as the United States. Paid apps like Venmo, Zelle and Square’s Cash app have noticed that their usage is increasing. Zelle, for example, saw its transaction volume increase from 63% in the first part of 2020 to more than $133 billion.
“The lifestyle of various means of payment makes sense from a holistic point of view,” says Wintergerst, 57, referring to the fact that the need for sustainable payments compatible with coins and counterfeits remains strong despite the increase in electronic payments. “There will have to be payment methods, which still work when a power plant is removed, and where you can pay without a trace.” In fact, today, there are still $8 trillion in coins in circulation, an amount that increases by 3 to 5% according to the year, and more than part of all payment transactions on the planet are now made with pa according to the currencies.
In 2019, 46% of G-D’s $2.9 billion in profits came from its financial generation department, which includes the design and printing of banknotes. Array employs another 4,800 people and works with 145 of the world’s 195 central banks. Although the expansion of G-D into virtual, adding cellular security in the form of eSims used in Apple iPhones, is developing faster, the department that includes printing cash on paper grew by 7% last year.
The German company is known for innovating its banknotes. When Armenia recently sought to upgrade its 1000 to 100,000 denomination drams after 20 years, G-D used a new polyester and paper substrate to make the coin more than two to three times longer than its previous currency. In addition, beyond the popular watermarks and magnetic stripes discovered on top paper banknotes, the company has begun to offer so-called secret security features, adding code published on paper with a laser that can only be read with soft and ultrafluorescent infrared. violet sensors published directly in the visual work.
At the end of 2018, only about 11% of the world’s banknotes were published in personal printers. The largest silver printer at the moment is the largest at the moment, with a market share of 23%, only the troubled British company De La Rue, which owns 27%. After a series of problems, adding up the unpaid debts of its impassive consumer Venezuela, the loss of his British passport contract to a French printer and distressed management, his rival De La Rue recently suspected his division and announced that he might find it difficult to continue. as an ongoing company.
It was founded in Leipzig in 1852 through a pair of young entrepreneurial craftsmen Hermann Giesecke, 21, and Alphonse Devrient, 31. 10 thaler banknote (the word “dollar” is derived from Thaler). In one aspect of the note was the Goddess of Fortune of Saxony-Weimar-Eisenach located between 10 and surrounded in all respects by watermarks. The couple have become known for their intricate designs. In every aspect of the goddess had engraved lines crisscrossed fractal spirals carved in turn and to reproduce with one hand.
Over the years, G-D has played behind-the-scenes roles in financial history. After World War I, the company was one of the leading printers of the inflatable inconsistent brands of the unfortunate Weimar Republic. In 1936, he published tickets to the Berlin Olympics for Hitler’s Germany. Subsequently, he published banknotes for the Franco regime in Spain. After the war, the Soviets expropriated most of the contradictions with Di-s’ actions that had not been destroyed, but the then president’s half-brother returned from a Russian POW camp and reformed the corporation in 1948 in Munich. In a decade, the company published some of the Bundesbank’s banknotes and expanded abroad. He had been the printer of Mugabe’s corrupt government in Zimbabwe since the 1960s. In July 2008, the German government forced the printer to avoid sending banknotes to Zimbabwe’s central bank, which recorded inflation of more than one million per cent on an annual basis.
It currently has more than 80 subsidiaries on five continents and printing operations in Germany and Malaysia. Design secure and fraud-resistant specialized banknotes and even help destroy them. While some central banks also have their own presses, D-G accepts special orders for high-demand denominations, prints them to size with a wide variety of security features, and ships them on demand. Although genuine currency orders can be sporadic, D-G’s security features for scanning cash on behalf of governments, adding the United States and casinos, generate recurring profits. The hope is that if D-G can help small central banks expand their own virtual currencies based on distributed accounting technology as well as child care facilities through Metaco, it can create a recurring profit style as the world moves virtually.
In July 2017, when Bitcoin reached $20,000 and the rise of ICO cryptocurrencies was reaching a bright peak, G-D disclosed its interest in virtual cash by publishing a white paper titled “Digital Money”. The 35-page report encouraged central bank consumers to adopt electronic options in their own century-old banknote business: “A virtual currency would be interesting for central banks because it would allow citizens on their digitalization journey,” he said. The Di-s predicted that many central banks would feel defeated by the immediate rise of virtual currencies of choice, adding discussions about Facebook’s Pound currency. After that, they sought to maintain control of their cash source, but had neither the knowledge nor the technical resources to compete in this area.
Then, last year, the company introduced its first software to merge the two worlds: G-D Filia. In the autumn edition of the official Forum of Monetary and Financial Institutions newsletter, Christian Jttner, GD’s global economic generation chief, has placed GD Filia as a “cash supplement”, a platform-independent knowledge record that can be created through central banks and distributed through advertising banks or other economic institutions, for use in smartphones. smartwatches and other virtual wallets. Although G-D is indistinct about the main points of its new software, such as bitcoin, its “coins” will likely be created with an algorithm, only they will be controlled through each central bank, which will be the knowledge record. This new type of currency would not require the use of an account and would be open source for payment service providers to integrate their donations directly into it.
In its filing documents, G-D opened the option that the new generation of central bank virtual currencies (CBDCs) would completely eliminate the need for intermediaries from advertising banks, as the currency can be issued directly rather than through a deposit institution. Citizens and others would thus have an account directly at their country’s central bank. Directly issued digital currencies would go a long way to “bank-free people” because all you would want to access them would be a smartphone. Dispersing stimulus into a crisis, for example, can be as undeniable as sending an email.
“It’s very difficult to transfer cash to other people when they don’t have a bank account, but they probably have a phone,” Wintergerst says. “The central bank’s offer would not only provide physical cash, but also virtual cash.” Wintergerst points out that the call for the new virtual currency software, Filia, is Latin. “She’s the new daughter or subsidiary of the central bank,” she said.
While Amazon Pay, Google Pay, Alipay, and Facebook have identified the opportunity to create a borderless payment network, everyone wants accounts and, as for-profit entities, they have business models that may disagree with the genuine price of the currency. Creation.
“The central bank’s virtual currency is a public good,” Wolfram Siedermann, D-G’s chief financial generation officer, said in a recent article. “It is universally accepted, free of social and economic barriers and can be used independently of the issuer, making it a democratic and flexible instrument indeed. To be widely accepted, CBDC will have to be, in fact, anonymous to the right user».
But Wintergerst explains that the programmable currency issued through a central bank would have some built-in features that your banknotes or even banknotes through Zelle might never offer: “You can simply say that up to $1000, for example, is not traceable, it’s anonymous,” he says. Array” But above $1,000, you have to call it, for example, because you can create triggers or thresholds for other values and for other purposes.” The shift aspect is that CBDC can be coded to track each transaction, necessarily erasing confidentiality.
Another thing that will have an effect on production is the charge. Bitcoin is notoriously expensive only from a power standpoint, and charges between $5,000 and $8,500 to mine a single bitcoin, according to a recent estimate. For its part, it charges between $30 and $250 for designing, producing and sending 1,000 tickets, with security devices, which in turn have the ticket price. The U.S. Federal Reserve, which prints its own bills, says it will pay about $0.077 according to a dollar up to $0.196 for a $100 bill. How much will you charge for creating central bank virtual currencies? Wintergerst does not say so, however, it will be less expensive than Bitcoin. “Give me a year or two and according to what you might be able to say,” he says.
During Filia’s progression with a team of programmers and internal economists, the Swiss company D-G discovered Metaco, which sells an institutional operating formula that allows monetary establishments to keep cryptocurrencies, tokens and currencies stable. Metaco’s software, called Silo, is a user interface between human operators of advertising banks and distributed blockchains or other records that feed the cryptocurrencies for which it acts as custodian. To date, 75% of Metaco’s business comes from banks, basically in Europe.
In July, the company introduced Metaco. The $17 million investment cycle it led was double what the Swiss startup was looking to raise in the first place. “We can give them access to central banks,” Wintergerst says. “Because when central banks turn more to the virtual money bureaucracy, they will want a custody environment.”
Report on how blockchains and cryptocurrencies are followed through is and the network in general. My canopy includes the use of cryptocurrencies such as
Report on how blockchains and cryptocurrencies are tracked through companies and trade network paintings in general. My canopyage includes the use of cryptocurrencies like Bitcoin, Ethereum and Ripple, and extends to blockchain programs that are not cryptocurrencies in finance, source chain management, virtual identity and a number of other use cases. Previously, I was a journalist on the blockchain news site, CoinDesk, where I highlighted the growing willingness of corporations to explore how blockchain can make their paintings more effective and, in some cases, useless. I have canopy blockchain since 2011, was published in the New Yorker and was syndicated nationally through american City Business Journals. My paintings have been published in Blockchain in Financial Markets and Beyond through Risk Books and I am quoted in industry study reports. Since 2009, I have run Literary Manhattan, a 501 (c) (3) nonprofit committed to showing Manhattan’s rich literary heritage.