All Sections

Home | Mike Cote's Business Notebook

Mike Cote's Business Editor's Notebook: Crane Currency is on leading edge of money-making security

May 06. 2017 6:13PM

Crane Currency recently designed banknotes for Sweden that honor famous Swedes, including director Ingmar Bergman and actress Greta Garbo, third and fourth from the top. (MIKE COTE/UNION LEADER)

BOSTON -- AS A LONGTIME tech entrepreneur, Stephen DeFalco knows what it takes to make money. As CEO of Crane Currency, he leads a company that makes money making money - the banknotes used by countries all over the world.

In an age when credit cards, mobile payment systems and cryptocurrencies might seem to be giving paper a run for the money, cash remains king. Crane Currency, a New England company founded more than 200 years ago, is among a handful of global players serving the 184 countries that issue banknotes.

DeFalco and his corporate team are housed on the 17th floor of One Beacon Street, a 37-story skyscraper in downtown Boston. Workers at a plant in Dalton, Mass., where the company was founded, produce the currency paper used for the company's clients, which include the U.S. Treasury.

Employees at a plant in Nashua produce the blue polymer material woven into $100 bills - a security feature designed to prevent counterfeiting. It's that 3-D blue line that divides the bill in half to the right of Ben Franklin's cranky mug.

"What that blue line actually is is a strip. We send it over to our paper machine, and we weave it into the paper," DeFalco said during an interview in Boston last week. "If you look at it from the back you can actually see that it runs the full course. It's just windowed on the front where sometimes it's under the paper, sometimes it's over the paper."

The Nashua plant, which Crane acquired in 2008 when it bought a local company, employs about 140 people and has openings for about 15 more workers who have skills in chemical engineering, optics, mathematics and statistical analysis, depending on the position.

The plant operates 24 hours a day, five days a week, but over the next year will be converting to a seven-day nonstop schedule, DeFalco said. The material workers produce there is key to Crane's international business.

"Nashua makes the security technology for all our customers everywhere in the world," DeFalco said. "We have it in about 40 countries and 80 denominations."

Crane Currency employs 1,100 people, including about 600 in the United States. In addition to its three New England locations, the company operates a research and development center in Alpharetta, Ga.

Paul Revere's paper

Crane Currency traces its roots to 1775, when Massachusetts papermaker Stephen Crane supplied the paper and mill used by engraver and freedom fighter Paul Revere to make the first U.S. securities so the young nation could pay its troops during the Revolutionary War. Crane's son, Zenas Crane, established his own paper mill in 1801 and continued what would become a family tradition producing paper for currency.

For most of its history, Crane was primarily a paper manufacturer, and has been the sole supplier of the cotton and linen blend used by the U.S. government to print currency since 1964. In 2014, Crane sold its technical materials division and the following year spun off its stationery business as a separate company, so it could focus on expanding the currency operation.

Those moves came after DeFalco joined the company in 2011 as the first outside CEO Crane has ever recruited. The privately held company appointed two other non-family chief executives over the years, but both of them were promoted from within.

This time, the board wanted a leader with experience leading a technology company rather than someone with a papermaking background. DeFalco, an MIT graduate who had just sold a publicly traded tech company in Toronto, relished the opportunity to return to Boston and run a private company again.

"Our board is a third private equity, a third Crane family and a third independents," said DeFalco, who grew up in New York. "What they really decided is (the company) is going to become a more global, more technology-oriented portfolio."

Going global

The U.S. government is among the few Crane clients that produce currency themselves, using supplies and technology Crane provides.

The company operates a plant in Sweden, which began outsourcing its banknote production to Crane in 2002. Crane is investing $100 million to build a 140,000-square-foot plant, about half the size of the Sweden facility, on the Mediterranean island nation of Malta, which it expects to open in early 2018.

Crane designs and prints currency for dozens of clients, including Mexico, the Ukraine, Peru and Lebanon. Its sales reps - who include one American - spend much of their time traveling. DeFalco's last trip included Geneva, Stockholm, Amsterdam, Quatar, Vietnam and Thailand. This week he's visiting Maylasia.

"Twenty individuals speak about 30 languages and work with central bank governors around the world on specifying Crane technology," DeFalco said.

The future of cash

Despite the rise in mobile payment technology, cash is growing in every country in the world except Sweden, DeFalco said, with growth in the U.S. at 4 to 6 percent a year. Electronic transactions generally have replaced the previous generation of electronics, not cash, he said. Someone using Apple Pay uses that instead of a debit card.

"It's the great myth. If you see an article saying cash is dying, turn to page three and the graph will say cash is just fine," DeFalco says. "It's always a prospective that it's going to die."

About 9 million households in the U.S., or about 7 percent of the population, were "unbanked" in 2015, meaning they rely on cash only, according to a survey by the FDIC. An additional 24.5 million households, nearly 20 percent of the population, were underbanked, meaning the household had a checking or savings account but also obtained financial products and services outside of the banking system.

"That number always surprises people," DeFalco said. "And then they start thinking, 'I pay my cleaning lady with cash. I pay my landscaper with cash.' And then you look at the number of people who pay their cable bills with cash."

Paper currency also is inexpensive, with a U.S. one dollar bill costing four cents to make, DeFalco said: "A U.S. one-dollar bill lasts 60 months in circulation. So you think about how many transactions we get for four pennies."

DeFalco, 56, says he doesn't see cash going away in his lifetime. Now that Crane has narrowed its focus to currency, it's better poised to compete with larger rivals like De La Rue, based in the United Kingdom, and Giesecke & Devrient, based in Germany.

"We're the new kid in the international arena," DeFalco said. "I think it is a great story of an old papermaking company morphing itself into a global technology leader."
Crane’s Nashua plant is all over security on the $100
Benjamin Franklin began sharing space with 3-D technology in 2013 when a $100 bill embedded with Crane Currency’s Motion micro-optics was released. Federal officials said the bill includes the most complex security features ever incorporated in a banknote.
Tilt the bill in your hands and you can see images of “100” switching with tiny bells from left to right. It’s designed to make you notice.

“Every U.S. $100 banknote has 750,000 20-micron lenses sitting on top of printing that is so small we could print two Bibles on a penny,” said Stephen DeFalco, chief executive officer of Crane Currency, whose Nashua plant produces the polymer material used for the bills.

“What you want is a feature that jumps out at the public — it wows them, it engages them, but can’t be replicated. This feature has never been counterfeited anywhere in the world.”

While most Americans don’t stuff their wallets full of hundred-dollar bills, that’s the most popular denomination of U.S. currency, held the world over as secure.

“The U.S. has $1.4 trillion in circulation. One trillion is in $100 banknotes,” DeFalco said. “Seventy percent of U.S. hundreds are abroad. It is the banknote of the world.”

Contact Business Editor Mike Cote at 206-7724 or

Business History Photo Feature Economy

More Headlines