Rows of dollar bills at the Bureau of Engraving and Printing in Washington, D.C. Alex Wong/Getty Images
Hosted by Kai Ryssdal
Get the PodcastThe United Kingdom got a new one pound coin today. The new coin has 12 sides, one hologram and a secret high tech feature that prevents it from being copied, according to the Royal Mint that produces the coins.
Counterfeit currency is nothing new. It’s an issue that has plagued most currencies — from the U.S. dollar to the Mexican peso to the Chinese yuan—forcing governments to consider a more secure design as well as getting rid of some bills altogether. In the world of counterfeit money, the most common culprits are the 20s, be they pounds, dollars, euros or pesos. Here’s a look at how different countries handle counterfeit currency:
U.K. coins
In the U.K., counterfeiters have also honed in on the coin market. The Royal Mint estimated that about 2.5 percent of 1.6 billion of 1 pound coins are fake —that means there are millions of pounds in fake coins in cash registers and wallets across the U.K. With counterfeit currency amounting to millions a year, it should come as no surprise that governments are finally looking to secure their currency— even in small denominations.
“In 30 years of minting —and 20 years of mine —there has probably not been any significant change in the way we secure coins. This is a big leap for us,” Gordon Summers, the chief engraver at the Royal Mint, said in an interview with WIREDabout the new pound coin.
Alas, Summers would not disclose what the high-security feature of the coin is. He would only say that one needs a machine to detect it.
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Dollars
The United States’ counterfeit problem is mostly limited to its paper bills, with coin counterfeiters mostly focusing on collectible coins. The $20 bill is the most commonly counterfeited banknote in the U.S., while overseas counterfeiters are more likely to make fake $100 bills. The real $100 bills are more prevalent overseas as well, according to the Federal Reserve Bank of San Francisco. Overall, there’s more than $147 million in fake U.S. currency circulating globally these days, CNBC reported in 2015.
The agency tasked with investigating and preventing counterfeiting of U.S. money is the Secret Service. Yup, the agency best known for guarding U.S presidents is the one responsible for protecting the U.S. financial systems. According to its most recent annual report, the Secret Service suppressed 145 counterfeit manufacturing plants, arrested 796 counterfeit criminals and seized $58 million in counterfeit currency in 2015.
Pounds
Similarly to the U.S., the most commonly counterfeited banknote is the 20 pound note. Last year, 297,000 forged 20 pound bills were removed from circulation.
“In 2016 around 347,000 Bank of England counterfeit banknotes were taken out of circulation with a face value of £7.5 million,” according to the Royal Mint. The counterfeit 20 pound bills made up 85.6 percent of those counterfeits.
In the U.K., the Royal Mint works with the Serious Organised Crime Agency to track down counterfeiters.
Euros
It’s not just the dollar and pound that are plagued by counterfeiters. In 2015, about 999,000 euro banknotes were counterfeit. According to European Central Bank, the 20 euro and 50 euro notes are the most counterfeited banknotes. During the last six months of 2015, counterfeit 20 euro bills accounted for 46.2 percent of the counterfeit bills.
A€20 euro is one of the more commonly counterfeited currencies.
PHILIPPE HUGUEN/AFP/Getty Images
Pesos
If you are traveling to Mexico, you want to make sure that you do not end up with counterfeit pesos. According to Bank of Mexico, about 71 banknotes out of every million are fake.
It might not seem like a lot, but in 2015, the bank detected 306,063 counterfeit bills amounting to 99.1 million pesos. That’s equivalent to $5.4 million. The most common bills counterfeited were 20, 100 and 500 peso bills, according to Mexico News Daily.
Rupee
Rather than deal with counterfeits, India decided to just get rid of the 500 and 1,000 rupee bills last year. The two denominations were commonly replicated by counterfeiters and/or hoarded by workers who did not want to declare their income. By discontinuing those bills, the government is forcing people who might have such bills to take them to the bank and exchange them for other bills.
“This step will strengthen the hands of the common man in the fight against corruption, black money and fake currency,” Prime Minister Narendra Modi said in November.
In response to a Right to Information request filed by Harpreet Singh, the Reserve Bank of India disclosed that the number of counterfeit 100 rupee bills has gone from 68,741 in 2006-2007 to 221,447 in 2015-2016. Singh told the Times of India that he was surprised that 100 rupee notes were also not banned when their counterfeits were almost double the number of fake 1,000 rupee notes.
Overall, during the last decade, the RBI detected a total of 4.27 million counterfeit notes. Of those, about 1.3 million were 100 rupee notes, about 2 million were 500 rupee notes and about 701,002 were 1,000 rupee notes.
Yuan
In 2015, the People’s Bank of China, China’s central bank, unveiled a new 100 yuan bill in an effort to crack down on counterfeits. According to the Wall Street Journal, Chinese police confiscated 532 million yuan, equivalent to $85.6 million, in fake bills in 2014. The most commonly counterfeited notes were 50 yuan and 100 yuan bills.
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Counterfeiting is a complex issue that affects various currencies worldwide, and it's a topic that demands a multifaceted approach to combat it effectively. From my background in finance and security, I've studied the methods and technologies used to secure currency. The innovations undertaken by governments and central banks to prevent counterfeiting involve a blend of cutting-edge features, intricate design elements, and sometimes undisclosed security measures.
Let's delve into the concepts highlighted in the article about counterfeit currency across different countries:
Security Measures:
- UK's New Pound Coin: The Royal Mint introduced a 12-sided coin with a hologram and a secret high-tech feature to prevent counterfeiting. This coin illustrates the advancement in security technology applied to small denominations.
- U.S. Dollar: The Secret Service is entrusted with safeguarding the U.S. financial system against counterfeiters, emphasizing the gravity of this issue. The $20 bill is the most commonly counterfeited banknote domestically, while $100 bills are more commonly forged overseas.
Counterfeiting Trends:
- UK Pound & Euro: Both the UK pound and Euro face counterfeiting challenges, with specific denominations being more vulnerable. For instance, the 20-pound note is a primary target for counterfeiters in the UK, while the 20 and 50 euro notes face similar issues.
- Mexican Pesos: Counterfeit Mexican peso notes are detected at a rate of about 71 banknotes per million. Though seemingly low, in 2015, this amounted to a substantial sum, emphasizing the impact even a small percentage of counterfeit bills can have.
- Indian Rupee: India responded to counterfeiting by discontinuing the 500 and 1,000 rupee bills, which were extensively replicated. This move aimed to curb black money and corruption, forcing individuals holding these notes to exchange them via banks.
Law Enforcement and Detection:
- Counterfeit Seizures: Various agencies, such as the Secret Service in the U.S. and collaborative efforts between the Royal Mint and law enforcement agencies in the UK, work to track down counterfeiters, suppress manufacturing plants, and seize fake currency.
- Detection Challenges: Detecting counterfeit bills often requires specialized machines. In the case of the UK's new pound coin, Summers mentions that a specific machine is needed to identify its high-security feature.
Understanding the prevalence of counterfeiting across different currencies and the measures taken by respective authorities underscores the constant evolution in security features and the persistent challenge of combating counterfeit currency.