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Monnaie de Paris – a 12-Century-Old Institution Growing Like a Start-Up

September 11, 2012 – Before Christophe Beaux took over the helm of Monnaie de Paris in 2007, the French national mint was regarded as an ageing institution that was quite happy being part of the scenery on the banks of the Seine. Since his appointment, however, this ‘dozing old lady’ – as it has been called – has been infused with an energy that has transformed it into a profitable commercial company. A transformation that will be capped, in a few months’ time, by a rejuvenation of the 240-year-old Monnaie de Paris building, and the opening of its once-impenetrable doors to the general public. Currency News caught up with Christophe Beaux, who has just been re-appointed for a further five years, to find out how this transformation was achieved.

First of all can you tell us how you came to be at the Monnaie de Paris, and what you were doing beforehand?

I was appointed Chairman and CEO of Monnaie de Paris in 2007 by President Jacques Chirac. Previously, I was Deputy Chief of Staff at the Ministry of Economy and Finance, in charge of industry. Before that I was at the French Treasury and I also worked for a few years at the US investment bank JP Morgan in London. So my background is both as an investment banker and as a civil servant.

Could you give a brief history of the Monnaie de Paris?

It’s going to be a very long story because we are the oldest French institution and maybe the oldest in Europe as well, founded in 864 by a king named Charles the Bald!
So we have been producing French coins for 12 centuries, first for the monarchy, then for the two empires, then for the five republics. They were originally made in many workshops across the country, which kept them close to the people to minimise transportation. So, for example Lyon had ‘Monnaie de Lyon’ and Bordeaux had ‘Monnaie de Bordeaux’. All these workshops were later centralised within Monnaie de Paris, which retained its original name rather than being called, say, ‘Monnaie de France’.

Can you tell us more about the release of the government’s direct control over Monnaie de Paris and its recent restructuring?

There are two major aspects here. First of all, prior to 2007 we had been within the ministry, just like the Treasury, Budget and Customs departments. But in 2007 we were transformed into an industrial and commercial public establishment, which is a specific entity separated from the Ministry of Finance, but still 100% state-owned.
The second aspect is that when Monnaie de Paris started producing the euro, it hired many people on a permanent basis to produce the extra coins needed, which was a big strategic mistake because the staff was permanent while the need for extra production was only temporary. When I arrived at Monnaie de Paris it was losing money, so we implemented a major restructuring plan that included laying off 25% of the workforce. A big social blunder, but it had to be done. In one year, we went from 700 to 500 staff.

Can you give more details about the company in terms of turnover and location?

Today the company is located in two major operational centres. The headquarters are in the historical Paris building, which also houses our artwork centre that makes gold and silver commemorative coins, medals and everything else that requires artistic talent.
The other site is in Pessac, a small town near Bordeaux, in south-west France. It was built in 1973 but, although it’s almost 40 years old now, we have been investing every year to maintain the quality of our equipment. Last year we bought a new press and are always improving the facility, and so consider it state-of-the-art.
In addition to producing circulating coins, Pessac hosts the European research facility responsible for protecting euro coins against counterfeiting – the European Technical and Scientific Centre – which is attached to OLAF.
The company significantly increased its turnover after the reorganisation in 2007. This was due in part to its move towards new products like gold and silver commemorative euros, the intrinsic value of which is the same as their face value, and which became very attractive to people looking for a secure way to invest their money after the financial crisis.
Thanks to new products such as this, our turnover has increased by 50% during the past five years, which is the kind of growth usually enjoyed by start-up companies, and not 12-century-old institutions!

Could you please run through your portfolio of products?

We have three major business lines. The obvious one is the production of the euro for France, which we do under a monopoly umbrella, much like every other country with its own minting facility as a public service.
The second business line is circulating coins for non-French clients, including those within the eurozone. We produce euros for countries that don’t have their own facilities. But we have also attracted new clients outside the eurozone, as well as outside of our ‘historical roots’. These include not only Africa, but countries like Bangladesh and Oman. In a few weeks we will be starting production for Uruguay, and are therefore transforming into a global company. This business line represents about one third of our turnover. I would say that next to Canada, UK and Finland, we are the fourth largest coin exporter in the world.
The third business is commemorative coins, commemorative medals – such as Légion d’Honneur – and other artistic objects. Some of our pieces are designed by famous artists, including Karl Lagerfeld and Philippe Starck. And Christian Lacroix is now our long-term artistic advisor. Our artistic business is probably the most developed of all mints in the world, thanks to the beautiful workshop located in our 18th century building, facing the Louvre in the heart of Paris. In a few months time, we will be opening our premises to the public, where they will be able to see our craftsmen at work. Our aim is to maintain this long-lasting tradition of craftsmanship in the art of metalwork.

Do you produce your own blanks, or do you buy them in?

Both. Some we get through suppliers and some we produce ourselves. We have a partner in the Bordeaux region who does the plating for us. The sourcing is quite complicated but its main purpose is to diversify so we are not dependent on one source.

When did you start actively pursuing the international market for circulating coins?

It started in the 1980s with the African market and then expanded at the end of the 1990s, and even more so in the early 2000s when our facilities were  enhanced for the euro. Since this enhancement was much too large for France’s domestic needs, we needed to find new demand from other countries.

Do you have partnerships with the French banknote printers – Banque de France or even Oberthur – for the supply of holistic banknote and coin solutions?

Yes, we have good relationships with them in regard to exchanging client information and finding integrated solutions for clients who are rethinking their range of coins and notes. It is of course much better to work side-by-side with the note producers.

Why are the European Technical and Scientific Centre and the global Coin Registration Office with you?

I would say because of historical reasons, because of our relationship with other countries and, last but not least, because France has always been recognised as one the best coin producers.
We also have the best laboratory equipment for testing and analysis, which can establish whether a coin is counterfeit or not. In collaboration with the police of different countries, we are able to identify counterfeits and then to trace counterfeit coins to their origin.

Moving onto the wider industry now, do you see the supply of coins driven by price or service?

There are three key drivers of this market. Obviously price has been the growing concern of central banks in these past years, especially because of soaring metal prices.
Secondly I would say that coin quality is a key factor. Coin minting is a skilled activity, which calls for a high level of design stability to make counterfeiting difficult. If people are used to seeing two or three wrongly minted coins in a handful of ten, they won’t know the difference when a counterfeit comes along. You can only trust a currency when you are sure that much less than one coin in a thousand will be counterfeit. And this can only happen when your coins conform to the highest central bank specifications.
The third factor is to be able to provide the central bank with an integrated solution for its currency needs. This should include advising the bank on all elements of coin production and circulation, from choosing the coin range and metals to the withdrawal and disposal of old coins. Monnaie de Paris actually takes care of coin disposal itself by melting down the metal and then returning the proceeds to the central bank.

At the recent MAP Conference in Beirut, you gave a very spirited riposte to the presentation on the note/coin boundary, arguing in favour of an approach less biased towards banknotes. Could you explain your logic?

Basically, coins last much longer than notes and this is something banks should think about when setting coin/note boundaries, since transforming the lowest denomination note into a coin would, in some cases, result in significant cost savings. We have done a study with other mint colleagues in Europe to establish this point. Although a 5 euro note is cheaper than a 5 euro coin would be, the note only lasts six months because it gets dirty and unfit for use. But a coin lasts two, three, even four decades and the savings that would be made by switching from a 5 euro note to a coin would be roughly 10 billion euro of taxpayers money.
I say this not because I want to sell more coins, but because it is true. So there is no doubt that the ECB should make the change. The reason that this doesn’t happen, however, is because central banks are also producers of banknotes… But this is something all central banks should take into account because while, in the short term, a banknote is cheaper, in the long-term, it is the coin that is the cheaper by far.

One argument the banknote producers will make for the current coin/note boundary, is that you can’t get security into higher value coins. Do you agree with that?

No I don’t agree at all. We have developed many security features that are really difficult to imitate. For instance, in this year’s 2 euro coin for France – which is a commemorative coin for l’Abbé Pierre, a famous figure from recent French history – we have incorporated microtext. And in Canada they have developed a system that captures and stores an image of every single coin produced. Suspected counterfeits can then be compared with these images and very quickly identified as fake.
However, with counterfeits, it is not so much the design characteristics that are different to genuine coins, but rather the metal and the magnetic characteristics, which means counterfeits will not pass into vending machines. I think it is false to believe that a coin is less complicated to counterfeit than a note.

When comparing note and coin suppliers, 20% of the world’s banknotes are produced by the commercial sector, yet just about every minted coin is government-made. Do you see the fact that the industry is essentially government-owned to be a barrier to innovation and growth?

No, I am a civil servant and was also working for the banking sector so I am well-placed to know that this so-called difference between private and public enterprise is completely ideological. I have seen more old-fashioned behaviour in some investment banks than at the French Treasury!
Mints are public for two basic reasons – history and protection, which are very important factors in people’s lives. I don’t think it would be a good idea for private companies to produce coins, because coins carry more psychological weight and value than notes, and there is also the link between the precious metal and face value.
The second issue is that there are way too many coin producers. Today, the global coin-producing capacity is probably two or three times higher than global demand. So what we desperately need in our industry is consolidation. My appeal is not to dismantle monopolies and bring in private producers on the false assumption that they are more efficient. My appeal to the authorities, mainly in the eurozone, is rather to allow the 15 euro coin producers – five of which are in Germany – to merge into between two and four producers. Worldwide, meanwhile, there are around 40 producers, but around half this number would probably suffice.
Most countries are not ready for this consolidation, though; they feel that they would lose the sovereignty of striking their own coins. But this is a misperception since the sovereignty doesn’t lie in the striking of the coins, but in allowing the coins to be minted in the first place.  So sovereignty remains, regardless of where the coins are produced.


You should visit the website of Currency News for more information or if you wish to subscribe to their excellent newsletter. Beside this article you can read in the current August issue many informative articles. Just to give you an idea here are some topics:

  • Bank of Jamaica Focuses on Durability for New Banknotes
  • The Mystery of Canada’s Melting Notes!
  • Innovative Retail Payments – the Central Banks’ Findings
  • Malawi’s New and Extended Currency Family
  • Next Step in Introduction of Brazil’s New Real Series
  • Japan Mint Targets Asia and the Middle East

You can find the Currency News website here.

Currency Publications Ltd, a joint venture between Reconnaissance International and Currency Research and publishers of the industry newsletter Currency News is organising the 2nd CoinConference in Berlin 2013. To learn more about this event, please click here.

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