Joys of banknote collecting

Visitors checking out the goods and looking for goodies at Penang International Banknote and Stamp Fair held at Udini Square. — Photos: LIM BENG TATT and ZHAFARAN NASIB/The Star

Fair draws crowd seeking rewarding finds in rare notes, stamps

MONEY makes the world go round but for some, the value of the banknote transcends its worth as legal tender.

Notaphilists or banknote collectors look to the deeper historical and cultural significance of currency and the unique stories the notes and coins can tell via their many designs.

Each piece is a window into a country’s identity: celebrating everything from glorious milestones, founding leaders and folk heroes to economic activities, architectural marvels, natural wonders and native wildlife.

Collecting pieces and growing one’s cache over time can be immensely fulfilling.

The banknote collecting hobby has caught on in recent years as one does not need to spend a fortune to start and the money amassed is essentially a form of savings or investment.

Presently, some 180 currencies are recognised as legal tender among 195 countries. And with each currency comprising multiple denominations and variations, casual and serious collectors alike will never be short of potential additions to their cache.

There are no rules about what to collect, as it is all down to personal preference.

Oftentimes, a collection starts when one travels overseas and is smitten by the novelty of foreign currency.

Tan posing with the many banknotes she has collected on her travels to various countries.Tan posing with the many banknotes she has collected on her travels to various countries.

That was the case with cafe manager Hayden Tan Jin Yin, 34, who has visited a dozen countries and tries to save each domination whenever she can.

“They are reminders of the places I visited, cultures experienced and people I connected with,” shared Tan, who particularly liked the current series of Swiss franc notes which have a vertical orientation and abstract imagery of nurturing hands.

These were introduced from 2015 and well-received by collectors. The 50 franc design was voted the best new banknote of 2016 in an International Bank Note Society poll.

More countries are going vertical with their currency as research shows that is how people tend to handle money in daily transactions.

Malayan Banknote Fair founder Richard Lim, who started collecting in his youth, enjoys delving into the history and social milieu surrounding each issue.

“Banknotes show the world at a particular point in time. You can learn a lot about a country by what they put on their money,” he continued.

But not everybody can afford to travel frequently, so collectors often turn to trade shows like the recent Penang International Banknote and Stamp Fair 2023 organised by Lim’s company.

Many visitors were seen browsing through tray upon tray of notes and coins, hoping to score some good finds among the wealth of options.

Start local

Lim advised newcomers to start by collecting the ringgit as it was accessible.

Besides design aesthetics, the value of banknotes is also determined by condition, rarity and desirability.

Crisp and uncirculated pieces with no folds, stains or other obvious signs of handling are the most prized, especially if they are older pieces or commemorative issues with low mintage.

There is also a huge market for notes with “fancy” serial numbers. Some combinations are more desirable than others and can push prices significantly above face value.

$10 Board of Commissioners of Currency Malaya And British Borneo notes in use for some time immediately after Independence.$10 Board of Commissioners of Currency Malaya And British Borneo notes in use for some time immediately after Independence.

Most sought-after are “low” numbers and prefixes (such as AA0000001 to AA0000100) from the start of a print run. These are exceedingly rare and typically only pop up at auctions.

Collectors also place a premium on “solids” (fully repeating digits such as 8888888 or 3333333) and “partial solids” (such as 1111115 or 2227777).

Other numbers are easier to find in everyday situations like “repeaters” (combinations like 1010101 or 4567567), “radars” (palindromes that read the same front to back and back to front, such as 6543456 or 5001005) and “ladders” (either ascending like 1234567 or descending like 9876543).

Lim said all one had to do was keep an eye out when withdrawing money from automated teller machines (ATMs), receiving change from cashiers or exchanging stacks of brand new notes during festive seasons.

“Just be observant. You never know when you may chance upon something valuable.”

Lucky ones may find rare replacement banknotes, which in Malaysia bears a Z prefix.

These are printed to replace pieces with flaws or errors that do not make it into circulation. Quantities are small as typically only a few hundred out of every million banknotes printed would need to be replaced.

Locally, the most valuable now are the 1996 third series RM2 replacement notes. Expect to pay several thousand ringgit for a piece with the scarcest ZB prefix.

Sometimes, notes with flaws such as double printing, misaligned margins, ink blotches, missing serial numbers and miscuts get past quality control and make it into public hands.

Many collectors like Lim see the beauty in such imperfections and will snap up these flawed notes in no time. Generally, the more obvious the error, the more valuable the note becomes.

As their banknote collections grow, notaphilists will often shift their focus to acquiring rare and exotic pieces. The price and capacity for appreciation of these notes also come into play.

Some buy to hold for a while and will re-enter the market later to sell for a profit. For those with deep pockets, there are some holy grails to chase down.

The 1982 second series RM500 and RM1,000 notes which were withdrawn from circulation in 1999 and now worth much more than their face value.The 1982 second series RM500 and RM1,000 notes which were withdrawn from circulation in 1999 and now worth much more than their face value.

Old is gold

Spending money on money that cannot be spent may sound paradoxical, but serious collectors take pride in owning something rare.

Older banknotes often command staggering sums because time has whittled down their quantities to a few surviving examples.

And with the risk of some being further lost to incidents like fire, flood or theft, their value can only go up.

Globally, one of the most expensive pieces ever sold was an American 1890 $1,000 Grand Watermelon Treasury Note – so called because the motifs on the zeros resembled the juicy fruit.

This note fetched an eye-watering US$3.3mil at a 2014 Florida auction.

The most valuable local ones are the Malayan and Straits Settlements notes.

Penang-based money changer Amir Hamsa, 73, said prices rose after demand grew and supply dwindled.

“Many years ago, I acquired a 100-piece bundle of 1940 Malayan 10cents notes for RM1,000 and later sold it for RM1,500.

“Today, that stack would be worth RM3mil,” Amir quipped.

Collector Terry Neoh, 41, also appreciates just how precious old notes are, as quantities will only reduce and never increase.

“Even those in collections might degrade. You hardly find old banknotes in good condition,” he added.

Indeed, graded and uncirculated banknotes from the colonial era can sell for RM10,000 to RM90,000 at auctions.

In 2021, it was reported that a 1929 Sarawak $25 note sold for over RM210,000 while a 1940 $1 note went for close to RM190,000.

Banknote grading follows a universally accepted, 70-point numerical scale. Independent bodies like Paper Money Guaranty (PMG) consider a score of 70 “star gem uncirculated” as the highest possible – given only to pieces with flawless print quality and alignment with no evidence of handling at five times’ magnification.

Scores of 67 to 69 are considered “superb gem uncirculated” while 65 to 66 are “gem uncirculated”. These may have very minor handling or slightly off-centre margins.

Uncirculated pieces with moderate handling, smudges or corner issues sit in the 60 to 64 range.

Those that have been folded, handled, torn or soiled typically fall way below the 60 mark.

More than face value

Some more recent Malaysian banknotes also fetch good prices due to the unique circumstances behind their release or recall.

Many today have never held the 1982 2nd series brown- coloured RM500 or blue-green RM1,000 which ceased to be legal tender in 1999 and were withdrawn from circulation.

Pieces in good condition can cost from RM3,000 to RM15,000 each.

One should also look out for the 3rd Series RM1 notes from 1999 bearing the signature of Bank Negara Malaysia’s sixth governor Tan Sri Ali Abul Hassan Sulaiman.

Saiful holding a rare RM1 with the signature of the outgoing governor that was not meant for circulation.Saiful holding a rare RM1 with the signature of the outgoing governor that was not meant for circulation.

Kuala Lumpur-based collector and dealer Saiful Ibrahim, 45, said these newly printed notes were pulled from release because a new governor, Tan Sri Dr Zeti Akhtar Aziz, was about to take office in 2000.

“A bank in mainland Penang supposedly did not receive the recall and inadvertently released about 50,000 pieces.”

He said the batch had a CR prefix and serial numbers starting with 720 to 724.

Collectors want pieces in pristine condition, which can cost up to RM6,000 each. Some creases will halve the value.

Those visiting the United Kingdom might want to take a good close look at every new £5 note encountered.

To promote the release in 2016, four special pieces with micro-engravings of author Jane Austen’s portrait went into circulation. Three have been found and valued at £50,000 each. The fourth is still to be found.

On the opposite end of the spectrum are “banana money” issued by Japanese forces during World War Two. Its derisive moniker stems from the $10 note depicting a banana tree.

They were originally printed in Japan, had serial numbers and held the same value as the Malayan Dollar.

But to fund their war effort, the occupiers resorted to printing more money locally. These are distinguishable by the lack of serial numbers bar a simple prefix.

Lim said, “It caused hyperinflation which crippled the economy. It became so worthless after the Japanese surrender, angry locals burned them by the stack.

“But they hold a bit of novelty among collectors today and you can easily buy a piece for a few ringgit.”

To compound matters in wartime Malaya, the Americans’ Office of Strategic Services (OSS) and British Special Operations Executive (SOE) both produced counterfeits of the $10 note in an effort to devalue the currency.

Phillips showing samples of the $10 SOE counterfeit Japanese banana money from World War Two.Phillips showing samples of the $10 SOE counterfeit Japanese banana money from World War Two.

Singaporean dealer Donald Joseph Phillips, 64, said the telltale sign for these were the four prefixes used – MC, MD, MF and MK – the last being rarest. They also lack a watermark.

Hyperinflation also led Zimbabwe to issue a $100,000,000,000,000 or one hundred trillion dollar note in 2009. Though it was the world’s highest denomination note, it was only worth 40 American cents at the time and could barely get the owner of the note a loaf of bread.

But the oddity has since become popular among collectors, bringing prices up to US$100 per piece today and transforming worthless paper into a hot ticket.

And that is why banknote collecting captivates so many.

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