- In order to switch to the euro, authorities first fixed exchange rates for the varied national currencies into euros.
- When the euro was introduced, the old national currencies were demonetized.
- However, the old currencies remained convertible into euros for a while so that a smooth transition through demonetization would be assured.
2. United States of America – The highest value of denomination currently in production is the $100 bill, but in decades past, the Federal Reserve has issued $1,000, $5,000, $10,000 and even $100,000 bills.
- The first known use of the $1,000 bill coincides with the United State’s beginnings.
- The U.S. stopped printing the $1,000 bill and larger denominations of currency by 1946, but these bills continued circulating until the Federal Reserve decided to recall them in 1969.
- In 2015, the Zimbabwean government demonetized the Zimbabwean dollar as a way to combat the country’s hyperinflation that was recorded at 231,000,000%.
- The 3-month process involved expunging the Zimbabwean dollar from the country’s financial system and solidifying the US dollar, Botswana pula, and South African rand as the country’s legal tender in a bid to stabilize the economy.
- This move changed all the currency in the country to a new type of banknote that was made of a different more durable material.
- The first plastic currency in the country was released in 1992 and by 1996, all the banknotes being produced were polymer-based.
- The notes released by Reserve Bank of Australia were the world’s first long-lasting banknotes. Also, the polymer base made them counterfeit-resistant.
- Since the purpose was to replace paper with plastic and only the material changed, it did not had any side-effects on the economy.
- Earlier also, Pakistan had demonetized PKR 5 and PKR 500 denomination notes.
- From 1st December 2016, Pakistan will phase out the old notes as it will bring in new designs.
- Pakistan legally issued the tender a year and a half back, and therefore, the citizens had time to exchange the old notes and get newly designed notes.
- In 1968 and 1969 decimal coins which had precise equivalent values in the old currency (5p, 10p, 50p – 1, 2, and 10 shillings respectively) were introduced. D
- ecimal coins with no precise equivalent (½p, 1p, 2p equal to 1.2d (old pence), 2.4d, 4.8d respectively) were introduced on 15 February 1971.
- The smallest and largest non-decimal circulating coins, the half penny and half crown, were withdrawn in 1969.
- Other non-decimal coins with no precise equivalent in the new currency (1d, 3d) were withdrawn later in 1971.
7. Philippines – In 2015, the country demonetized its bank notes which had been in circulation for 30 years (introduced in 1985) with new ones which had only been in circulation since 2010 to prevent counterfeiting. From January 2017 onward, the old bills will be demonetized, or will no longer have monetary value.