Destruction of Banknotes Outside the Central Bank

Abstract

Developments in Norges Bank’s cash handling services for banks in the 1980s and 1990s led to a need for a clearer distinction between central bank responsibilities and commercial services for banks. As a result, Norsk Kontantservice AS (NOKAS) was established in 2001. This raised the important question of whether the destruction of banknotes could be delegated to an external company, which Norges Bank decided to do. To our knowledge, no other central bank has outsourced this task to the same degree. This article presents the considerations taken into account, the system established to make adequate provision for security, and experience so far.