The production of new money needs to be meticulously thought out. Not only is it necessary to have very high security controls, with several strategies to prevent fraud, but the amount of notes and coins in circulation needs to keep the economy balanced.
Find out more about money production in Brazil, who is responsible for this process and what happens to the notes and coins that are taken out of circulation in this post.
Who produces money in Brazil?
The Casa da Moeda do Brasil (CMB) is the official “factory” of all the money that circulates here in the country. It is a state-owned company located in the city of Rio de Janeiro, which has existed since 1694. In other words, for over 300 years.
In addition to producing reais and centavos, the Mint also produces other documents that need to have an anti-fraud system, such as passports. And, surprisingly, from time to time it is contracted to perform services for other Latin American countries, such as:
- Argentina;
- Bolivia;
- Costa Rica;
- Haiti;
- Paraguay;
- Peru;
- Uruguay;
- Venezuela;
- Suriname.
How many new coins and banknotes are produced daily?
The person responsible for keeping an estimate of how many notes are in circulation and defining the need to produce more money is the Central Bank (Bacen).
The main objective of this institution is to control inflation. In other words, to keep in circulation only the amount of money that corresponds to the quantity of goods available to the consumer, preventing industries from increasing prices.
For this reason, there is no specific number of notes and coins that are put into circulation every day. The value varies in relation to the financial health of the country and the number of banknotes that are damaged and no longer usable.
How are coins and banknotes made?
As explained, the Central Bank keeps track of the money in circulation and requests the Mint to produce new banknotes and coins. See below how the Mint makes the money that circulates in Brazil.
Coins
In the case of cents, stainless steel or low-carbon steel, depending on which coin is being produced, is turned into discs in a mold. These are then passed through presses that emboss the discs that identify the values and other specific features of Brazilian money.
They can then be plated with bronze (5 cent coins) or copper (10 and 25 cent coins). The 50 cent coins are not plated with any other metal. The 1 real coins are made of stainless steel without a plate and are surrounded by a bronze-plated steel disc.
Banknotes
The banknotes are made in three layers: a cotton core surrounded by two wood pulp layers, one on each side of the note. The tools that prevent the banknotes from being cloned are printed on the cotton core. The process involves:
- Creation of the watermark, which is the figure of the effigy of the Republic, which can only be seen against the light;
- Printing of figures, such as the representative animal and the value of the note;
- Carrying out chalcography, which is the creation of reliefs.
All steps are carried out under constant supervision under a microscope. In addition, in some steps, the paint can take up to two days to dry. Therefore, the entire process takes 12 days.
After this period, tests are still carried out to see if the weight and resistance are within the standard. All of this makes it very difficult for the real thing to be cloned perfectly.
Tip: Check out how to declare cash on your Income Tax
What happens when a coin or note goes out of circulation?
If a note is removed from circulation because it is torn, the Central Bank uses it to feed furnaces in the manufacture of construction materials. Worn coins are melted down and remade.
In the case of money that has been replaced by another model or no longer exists, no collection is made. Bacen wait for the banknotes and coins to wear out naturally before removing them from circulation and reusing their material.
Now, every time you need to use your money, you can remember this post and how complex the process of maintaining the country's economy is. Leave a comment if you already knew everything that happens to your notes and coins before and after they pass through your hands.
