00:02High in the mountains of one of Asia's poorest countries,
00:06farmers are turning a shrub into paper used for Japan's money supply.
00:11Most of Asia has gone digital,
00:13but Japan still uses yen for nearly half of its transactions.
00:17For centuries, it relied on a crop grown at home,
00:20until the supply dried up a few decades ago.
00:23So it turned to Nepal, where Adgele, a once low-value shrub, grows wild.
00:28This new demand from Japan is turning it into a cash crop
00:33and revitalizing villages across Nepal.
00:42With plastic banknotes on the rise,
00:45why are some countries still sticking with paper?
00:48And what will happen to Nepal's new big business and a cashless future?
00:56Ramesh Rai has been harvesting Adgele for 25 years.
01:02For centuries, the shrub was used in Nepal to make paper for government documents and religious texts.
01:07But demand abroad was limited.
01:09That changed in the 1980s, when Japan experienced a shortage of Mitsumata,
01:14the plant used to make yen.
01:17Supply began declining as harvesters left the trade for other work.
01:20Looking for a new source, Kampo Inc., a Japanese paper supplier,
01:25discovered Adgele growing abundantly in Nepal,
01:28and saw it as a potential lifeline for producing yen.
01:36Like Japan's Mitsumata, Nepal's crop is durable and can be harvested every few years,
01:42ensuring a steady supply.
01:50Kampo sent specialists to Nepal starting in 2015
01:54to help farmers boost yields and improve the quality of their harvests.
02:08Kampo taught Nepalese farmers how to steam the bark,
02:11instead of peeling it raw,
02:12so that the outer part would be easier to strip off.
02:16They also used new stripping machines to remove the top layer of bark,
02:20leaving behind just the inner part used to make paper.
02:32A few rounds of soaking the plant makes it easier for workers
02:35to peel off the rest of the outer bark by hand.
03:01Workers lay out the bark in the sun.
03:03If it's cloudy, it can take two days to dry out.
03:07This is an important step to prevent mold growth
03:10and reduce the weight of the Adgele during transport.
03:14When Kampo first started training farmers,
03:16Japan rejected 20% of their Adgele.
03:19But now...
03:28Nepal went from producing 30 tons of Adgele in 2012 to 150 tons a year.
03:36Ramesh can earn up to $2,800 annually.
03:39That's double the amount he used to earn from corn and potatoes.
03:42And he can sell his Adgele for five times what it was worth before the Japanese market.
03:56The farmers' Adgele passes through ports in Kathmandu and Kolkata, India,
04:01before reaching Japan.
04:02Japan's National Printing Bureau turns the raw materials into banknote paper.
04:06The yen are printed in sheets and given security features like holograms.
04:13Machines cut out individual notes.
04:15Then they're packaged up.
04:16Every year, this mint produces about 3 billion bills for the Bank of Japan.
04:22The country has long valued physical currency.
04:26Its first copper coins date back to 708.
04:29But by the 9th century, metal shortages and counterfeiting
04:32pushed the country to trade rice and silk instead.
04:35In the 12th century, it adopted Chinese coins,
04:38which were widely trusted across East Asia.
04:41In the early 1600s, Japan began minting its own gold, silver, and copper coins
04:46to stabilize trade and regain control over its economy.
04:50By the mid-1800s, after centuries of isolation,
04:55it decided it needed a modern currency to keep pace with Western powers like Britain and the U.S.
05:00Japan started printing its yen made with the Mitsumata shrub in the 1870s.
05:06That's really the time period when a lot of countries around the world started issuing paper currency.
05:13People are starting to organize themselves into what would become nation states.
05:17That's Bill Maurer, who's been studying currency for 25 years.
05:20One of the ways that you advertise your existence as a nation state is through things like a flag or
05:27an anthem,
05:28but also banknotes, territorial currencies.
05:32In the 20th century, war and bank failures in Japan led many people to keep their savings in cash.
05:39People hold on to cash because of its anonymity, because of its privacy,
05:43and also for populations that experienced wartime trauma because it always works, right?
05:51When the electricity goes out or the network goes down, your banknotes are always going to work.
05:56For centuries, paper was the default for banknotes around the world,
06:00typically made from cotton and linen.
06:02But in 1988, Australia broke the mold, becoming the first country to issue plastic-based bills
06:08to combat counterfeiting and extend the life of cash.
06:12Over the next several decades, dozens of other countries replaced paper with polymer in their bills.
06:18There's pluses and minuses to each of them.
06:21The people who are designing polymer banknotes almost forget that human beings use them,
06:25and human beings are forgetful and sloppy, and they're going to run them through the laundry.
06:32Or they're going to keep them in a wallet in the glove compartment and expose them to extreme heat,
06:37and they might melt.
06:39Despite this, plastic banknotes last two and a half times longer than paper ones.
06:44Plastic bills are typically harder to counterfeit, thanks to security features like see-through windows,
06:49holographic foils, and color-shifting metallic films.
06:54But paper notes have security advantages, too.
06:57Any kind of note made out of an organic substrate has a particular kind of feel.
07:03And that's useful because the way that most cash handlers detect counterfeits is by the touch, not so much by
07:11sight.
07:12That feel, along with Japan's long tradition of papermaking, is why the country stayed loyal to paper when it introduced
07:18a new banknote in 2024.
07:20And people like it in part because it's part of an artistic heritage.
07:30Most of us who are interested in Japan are talking about these new yen notes, especially these impressive holographic images.
07:36The bills feature 3D holograms and special marks to help the visually impaired.
07:41This area, it has like this friction that you can literally feel.
07:45The new bills are made from Nepal's Argeli.
07:49The whole reason that Argeli was selected is because when you make paper out of the pulp from the bark
07:54of that plant,
07:55it gives the same kind of touch, it gives the same feel as the traditional paper that they were using
08:01in Japan.
08:07Before the yen market reached these villages, many people in this region left home to find work in India or
08:14the Middle East.
08:15Those who stayed had to trek to faraway markets to sell their goods.
08:32Now with rising demand for Argeli and new roads being funded by the Nepali government,
08:37villages are seeing renewed growth.
08:55By growing Argeli exclusively, Ramesh is able to employ about 50 people, the majority of which are locals.
09:02We need to be working with each other, because we can invest 60 people in the world's future to who
09:13are suitable to buy a house.
09:16We need to be able to buy a house through the market to a move to the shop.
09:17We need to buy a house for a house.
09:19We need to buy a house for one another.
09:21We need to buy a home that's the best and fun.
09:24But how long will this boom last if Japan ditches cash?
09:29Japan's cashless rate more than tripled over the past decade to about 43% in 2024,
09:35and the government aims to raise it to 80%.
09:46Kampo is working to get arge-li farmers to produce other products for Japan, too.
09:56Farmers like Tikaram Katiwara say they're ready if the demand for arge-li dips.
10:01He's already prioritizing other crops that he can harvest more frequently, like kiwi.
10:07But demand for cash probably won't go away completely.
10:12Nearly a third of Japan's population is over 65.
10:15Older generations grew up in a cash-first economy, and many are still more comfortable with it.
10:22And Japan's near-zero interest rates mean bank savings earn almost nothing.
10:26It's very important for a country's security to have a well-functioning cash cycle
10:32in case of conflict, trauma, hurricanes, floods, that kind of a thing.
10:37So even if it were to become less cash-dependent, which I don't think that it would,
10:43the central bank is probably still going to encourage people to keep some cash on hand.
10:47For Japan, I want to know that Nepal is working for Japan.
10:52And I want to know that Japan is helping the world's economy.
10:59And Nepal, you've got to know that Nepal is working for.
11:08We are a good country, a poor country.
11:14We are a good country.
11:17We are a good country, and we are a great country.
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