Goodbye round GBP, hello 12-sided GBP
The new 12-sided British pound will replace the 32 year old round pound coin this year, ensuring that counterfeiting will be more difficult. The pound, being the world’s highest value sovereign currency, is about to become even more valuable
As 2017 gets underway, the Royal Mint, which is the longstanding institution that is permitted to strike British coins, is preparing itself for a revolution in that an all new Pound Coin is set to make its debut in March.
In terms of significance, the British pound is a vital instrument in today’s electronic trading world. Last year, FinanceFeeds made a clear point that the British Pound has for very many years been the strongest currency in the world, and still remains so, yet it has played second fiddle to the US Dollar as far as the benchmark currency for FX trading is concerned, even despite the Tier 1 banks – the uppermost level of the liquidity providers from which FX markets are actually created and order flow is handled for the entire world being based in London.
Yes indeed, the US dollar is a global standard for trade in all sectors of industry, across all international settlements and for creating comparisons and performance statistics. Effectively the US dollar is the measure by which to calculate absolutely everything, everywhere, yet the British pound remains the highest valued currency.
Dissenters have amassed ever since the United Kingdom’s electorate took to the polling booths and took the step that will future proof the British economy entirely by voting to leave the European Union.
The British pound dived in value to a 31 year low immediately – but still remained higher in value than any other currency.
It is too easy to consider the difference in currency values on face value and to look at the superficial soundbites that dominate mainstream market analyses that assess vanilla currency values without looking at what is actually behind these movements.
Taking a close look beneath the surface reveals a totally different set of circumstances and shows why the Pound is heading for a massive long term rise, and will be the best of the lot by far.
Confidence in British business is high – stock in FTSE 100 listed companies has not reached such lofty heights since 1986 and the stock market in Britain which lists the nation’s hundred most valuable firms ended at a massive high at the end of 2016, this being an indication of the confidence that investors (some of which are majority shareholders) have in British business once the nation is freed from the unproductive burden of sponsoring the European Union to the tune of several billion per year, and being exposed to European Central Bank debt created by its policy of handing out free money to bankrupt countries over and over again and selling its debt back to the taxpayer numerous times.
This does not happen in highly productive Britain, whose FinTech and financial sectors dominate the world. London’s financial sector employs just 0.0009% of Europe’s workforce, yet is responsible for 19% of all tax receipts. Now that is the sign of efficiency.
Thus, the introduction of a new pound coin is akin to the introduction of a new benchmark by which many other instruments can be measured.
The new 12 sided coin is harder to counterfeit, thus adding another string to its bow in terms of value and authenticity, and actually that in itself can certainly be a factor in upholding its value as a tradable instrument.
The outgoing coin that the new 12 sided coin replaces took the place of the Bank of England £1 note, which ceased to be issued at the end of 1984 and was removed from circulation on 11 March 1988, though still redeemable at the Bank’s offices, like all English banknotes. One-pound notes continue to be issued in Jersey, Guernsey and the Isle of Man, and by the Royal Bank of Scotland, but the pound coin is much more widely used.
As of March 2014 there were an estimated 1,553 million £1 coins in circulation with an estimated face value of £1,553 million. The Royal Mint estimated in 2014 that 3.04% were counterfeit.
The final round coins were minted in December 2015 with its replacement, a new 12-sided design, to be introduced from 28 March 2017 onwards.
The new coin is to be of a similar 12-sided shape to the pre-decimal brass threepence coin, have roughly the same size as the current £1 coin and will be bi-metallic like the current £2 coin. The new design is also intended to make counterfeiting more difficult, via an undisclosed hidden security feature, called ‘iSIS’ (Integrated Secure Identification Systems).
The round £1 will be legal tender alongside the new, more-secure coin until October 15, 2017 and the public are being urged to use their current £1 coins or bank them before they lose their legal tender status.
The British government estimates that around a third of the £1.3 billion worth of coins stored in piggy banks or saving jars around the UK are the current £1 style, and some of those returned by the public will be melted down and used to make the 12-sided version.
Photo source: The Royal Mint