The Monetary Authority of Singapore (MAS) has encouraged members of the public to consider switching to "Fit for Gifting" notes (Fit notes) in an effort to help reduce carbon emission.
Fit notes are used notes that are deemed to be generally clean and suitable to be recirculated.
The condition of these notes has been verified by banknote processing machines and are of similar quality as those that we get from the automated teller machines, MAS stated in a press release on Dec. 6.
The Fit notes will be available in all denominations.
More details will be released closer to Chinese New Year 2023 (CNY).
Environmental impact of producing new notes
MAS issues close to 100 million pieces of new notes for CNY and other festive periods annually.
These new notes are typically used once during CNY before returning back to MAS after consumers deposited them back in the banks.
While MAS tries to recirculated these returned notes, such as replacing notes that are torn, dirty or generally beyond recognition, there is still a large amount of excess notes.
The excess notes are eventually destroyed before reaching the end of their useful life.
Based on MAS' report, the carbon emissions from the issuance of excess new notes are comparable to powering 430 four-room HDB flats or it would require planting of 10,000 trees to offset.
Producing new notes for festive gifting that would quickly be destroyed is not environmentally-friendly.
This is also not in line with Singapore's aspiration to achieve net zero carbon emissions by 2050, MAS added.
Stop issuing "good as new" S$2 notes
MAS will also stop issuing the "good as new" S$2 notes from CNY 2023 onwards.
These S$2 notes are exchanged during CNYs before returning to MAS, and the additional round of machine processing for these notes to be used again in the subsequent CNYs produces carbon emissions.
The "good as new" S$2 notes were launched in 2013 to reduce the printing of S$2 new notes.
MAS and The Association of Banks in Singapore (ABS) encourage the use of Fit notes and e-hong baos instead of new notes.
Members of the public who prefer to give physical hong baos should consider switching to Fit notes.
MAS and the banks will be working together to make Fit notes more accessible to the public.
MAS has seen a rise in the number of people using e-hong baos for festive gifting. There were 10 per cent more transactions in CNY 2022, compared to 2021.
Top photo via Mothership