In November 2016, the U.S. Secret Service seized $30 million in fake U.S. bills and €50,000 in fake euros from operations throughout the countryside of Lima, Peru—the largest seizure of counterfeit currency to date.1 In 2015, the Secret Service suppressed 145 counterfeit manufacturing plants and prevented the circulation of more than $58 million in U.S. currency.
“The threat of counterfeit currency to the United States’ financial system has grown in recent years,” according to the U.S. Secret Service,2 citing advances in scanning and printing technology and other nations’ adoption of the U.S. dollar as legal tender.
To combat counterfeiters and maintain public confidence in their countries’ currency, treasury departments around the world are issuing new series of banknotes and coins on a more frequent pace. With any change in currency design, businesses that handle cash must prepare and plan. That includes awareness of the new changes—what to look for—as well as an understanding of how these changes may impact cash handling and processing equipment.
Causing Fits for Counterfeiters across the Globe
In recent months, there has been no shortage of currency redesigns worldwide, all aimed at reducing the costs of counterfeits to businesses and taxpayers.
In April 2016, the U.S. Treasury announced plans to introduce new $20, $10 and $5 notes. Initial concepts are underway, and designs are scheduled to be unveiled in 2020, with protection “against counterfeiting through effective and sophisticated production” noted as a top priority.4 The current U.S. $100 bill, which was introduced into circulation in 2013 following a 10-year development timeline, is the most sophisticated U.S. banknote with a number of overt security features; however, it is expected that $100 bills remains the most commonly counterfeited U.S. banknote outside the United States.5
In the U.K., a 12-sided, bimetallic £1 coin entered circulation March 28, 2017. The Royal Mint has dubbed it “the most secure coin in the world.”6 While only a small percentage of notes are counterfeit—just .0099% in 20167, 85.6% of them the £20—the Bank of England started a new series of polymer banknotes and recently released a new £5 banknote to stay one step ahead of counterfeiters. These banknotes include several new security features, such as a see-through window and color foil portraying Elizabeth Tower.8
In its latest efforts to make euro banknotes even more secure, the European Central Bank unveiled the Europa series 2 banknotes. The first three banknotes in the new series, the €5, €10 and €20, started circulating in 2013, 2014 and 2015, respectively. The new €50 was unveiled in July 2016 and began circulating April 7, 2017. New design and security features make the banknotes easy to distinguish from the first Europa series and more resistant to counterfeiting. For example, the new transparent portrait window feature makes it easy to check the new Europa series €50 for authenticity, using the FEEL, LOOK and TILT method.9
Security & Substrates: Paper vs. Polymer
There are two main, competing substrate technologies for today’s banknotes: paper and polymer. It’s up to each country’s central bank or treasury department to select which substrate will work best for its unique economic and political situation. Neither technology is immune to counterfeiting, so security features other than the substrate alone must be developed and applied. While some of the innovative security features in the new polymer banknotes can be incorporated into paper—such as the small transparent window—there are security features of some paper banknotes, for example thread, that cannot be easily integrated into polymer. Businesses that handle cash should take note of any substrate changes in their country’s currency and understand how this may impact their operations and currency handling equipment.
Keeping Currency Processing Equipment Current
While treasury departments diligently work to develop new currency designs, an important step that should not be overlooked is the work being done concurrently by banknote equipment manufacturers to ensure that machines are ready to accept the new note designs once they enter circulation.
In addition to recognizing and denominating the notes, equipment must also authenticate them based on built-in, high-tech machine readable security features.
A few select vendors are actively involved in the redesign process, working alongside central banks to leverage their expertise in sensor and authentication technologies into the designs of currency processing equipment. This represents a major investment of time and money on the supplier side to assist in the research, development, and testing of these technology-laden currencies—plus the subsequent development and testing of equipment to process the new currencies.
With a three-to-five-year development time frame for the introduction of new detection and authentication technologies, currency processing equipment suppliers must be aware of banknote and coin changes well in advance of introduction. Otherwise, a lag time will result during which customers will be at risk because they cannot authenticate the new series of bills.
Seamlessly Making the Change
Currency redesigns can be profoundly impactful, therefore it’s essential to be prepared and work with vendors that have proven expertise and knowledge of domestic and international currency changes. Equipment from trusted vendors is built to accommodate future currency upgrades and incorporates the latest advanced counterfeit detection hardware and software, protecting businesses from the risk of both counterfeit currency and operational disturbances. This all contributes to a seamless experience for the customer, freed from the worry of how changes associated with currency redesigns will affect business operations.
1United States Secret Service, “$30 million in counterfeit U.S. currency seized in historical Secret Service operation” https://www.secretservice.gov/forms/GPA-26-16-Operation-Sunset-Press-Release.pdf
2U.S. Secret Service, “2015 Annual Report” https://www.secretservice.gov/data/press/reports/USSS_FY2015AR.pdf
3 Banknote Info.net, “FEEL, LOOK, TILT” http://banknoteinfo.net/feel-look-tilt/
4 Treasury Department, “An Open Letter from Secretary Lew:” https://medium.com/@USTreasury/an-open-letter-from-secretary-lew-672cfd591d02#.f9g90zdvm
5 Reuters, “U.S. Fed ships new $100 bills with anti-counterfeit features” http://www.reuters.com/article/us-usa-currency-idUSBRE9970IZ20131008
6 The Royal Mint, “Meet the New £1 coin”, https://www.thenewpoundcoin.com
7 Bank of England http://www.bankofengland.co.uk/banknotes/Pages/about/counterfeits.aspx
8 Bank of England, “The New Fiver”, https://www.thenewfiver.co.uk/
9 European Central Bank, “The Euro: Our Money”, http://www.new-euro-banknotes.eu/Euro-Banknotes/Europa-Series-Introduction