Recently, the Indian government approved the Reserve Bank of India to conduct field trials of plastic or polymer banknotes of ₹10 denominations. These notes are touted as future-proof because they are more durable than paper notes, water-resistant, and have a long shelf life. However, given the rapid pace of technology, one might question whether plastic notes are the ultimate form of currency. The answer is no.
If technology experts and economists are to be believed, the currency of the future could go a step further than plastic notes and emerge in the form of smart notes. Their unique feature will be the ability to bridge the gap between online and offline payments. It’s worth noting that this is currently just a concept.
According to historian and currency expert Franklin Noll, smart banknotes will be a hybrid of traditional paper or plastic currency and digital payments.
The concept of smart notes is that they will be like any other note to the touch and look, but they will contain an electronic chip and electronic ink, similar to RFID.
These future notes will be able to connect to digital networks and smartphones. Digital payments can be made by touching or scanning these notes. They can also be recharged and used offline like a regular note.
The concept of smart notes suggests that if you have a ₹100 smart note, the chip and e-ink screen in the note will clearly show whether the note contains any money or value.
You can also make digital payments to shopkeepers using this smart note, and upon doing so, the value displayed on the note will become 0, indicating that the note has been digitally spent.
This note can be recharged with another ₹100 using a phone or other digital medium, and can be used like a regular note.
Central banks around the world are working on creating digital currency, yet it’s impossible to achieve complete digitalization. This is also because many people don’t have bank accounts or smartphones, preventing them from taking advantage of digital transactions.
Furthermore, in the event of network or internet outages, digital payments come to a complete halt, but smart notes will be accepted offline like regular currency.
In times of crisis or recession, people consider cash more secure. In such a situation, smart notes will provide them with both a sense of security and smart functionality.
Just as India has moved towards plastic notes today, it is expected that in the future, the world will also develop smart notes, eliminating the distinction between online and offline currency.