The ‘round pound,’ the ‘Maggie,’ or whatever you may want to call it, Britain’s round £1 coin has been replaced by a 12-sided coin meant to deter counterfeiters. Since the round coin has been declared redundant by the Bank of England the question remains: Why are about 145 million of the older coins still outstanding?
According to the British Royal Mint, a staggering one in 30 of the round version of the denomination were counterfeits when the newer 12-sided (dodecagonal) version was introduced on March 28, 2017. This statistic sounds even worse when you consider there were about 1.7 billion round variety pounds in circulation at that time. That calculates to about 57.8 million fakes. At the exchange rate current at the time this article was being written this equals more than $69 million U.S. in fake £1 coins.
The BRM and central bank were anxious to rid themselves of the round pound as quickly as possible. No one seems to know why so many of the no longer legal tender coins are still outstanding.
According to a BRM official, “Our communications campaign encouraged the return of old £1 coins when legal tender was removed. The small proportion of coins not returned can continue to be deposited into a customer's account at most high street banks in the UK. We expect there to be some returns for a number of years to come as people find these coins.”
So, what does the BRM do with the demonetized round £1? The brass composition coins have been melted and used as part of the newer ringed bimetal version of the denomination. The newer coins have been billed by the mint as the ‘most secure in the world.’ The dodecagonal shaped coin has micro-sized lettering inside both rims, a hologram, and due to its composition, an electronic signature that can be detected by vending machine mechanisms and coin counting devices. What remains to be seen is whether or not, according to the claim, this coin is the most secure in the world.
The £1 coin was dubbed the ‘Maggie’ when it was first issued as a replacement for the bank note of the same denomination during the tenure of Margaret Thatcher as Britain’s prime minister. Unlike in the United States, the banknote ceased to be issued in 1984, being officially withdrawn from circulation on March 11, 1988. Today the notes can be redeemed at the Bank of England offices, but not by banks or merchants. Guernsey, Isle of Man, Jersey, and the Bank of Scotland continue to issue £1 banknotes despite the widespread use of the coins.
The British Treasury assured that the current range of circulation coin denominations is planned to be retained at this time. This consists of the penny, two pence, 5, 10, 20, 25, and 50 pence in addition to the £1 and £2. Banknotes currently in use include the Bank of England £5, £10, £20, and £50.
Although many of these coins no longer circulated, it wasn’t until the 1990s that some early decimal, as well as florin and shilling coin denominations, were officially demonetized. The pre-decimal penny and threepence were both demonetized in 1971, followed by the sixpence in 1980, decimal halfpenny in 1984, shilling and large diameter 5 pence in 1990, the florin and large diameter 10 pence in 1993, the large diameter 50 pence in 1998, and the round £1 in 2017.
All banknotes issued by the Bank of England since 1694 are redeemable “at the discretion of the issuer,” according to the most recent edition of MRI Bankers Guide to ForeignCurrency. All 10-shilling banknotes are redeemable at 50 pence each.
The MRI guide also notes, “If Brexit becomes effective, currency import-export rules may change. Customs officers may question anyone carrying large sums of money as to its provenance, and may seize it if not satisfied with the explanation.”
While the £1 and £2 coins are not addressed by the MRI guide, the guide notes Bank of England currency is easily exchangeable in all major currencies as well as for Scottish and Northern Irish pounds “in most large cities.”