India will begin printing Rs500 & Rs1,000 banknotes on securitized "blue paper" in an effort to deter counterfeiting in the country.

After a significant “large-scale circulation of fake notes” throughout India over the past year, the Indian government has decided to begin printing Rs500 and Rs1,000 on special blue security paper to curtail counterfeiting in the region.

Blue paper is made by combining cotton and linen fibre with a special dye that only glows under ultraviolet rays. This dye also ensures the paper – which eventually in this case will be made into banknotes – also radiates a unique blue hue that makes it virtually impossible for colour photocopiers to reproduce.

The Indian government says the switch will not only deter counterfeiters, but will also pay off in the long run.
“The blue security paper has higher durability compared to normal currency notes. While it is costlier to produce, it is cheaper than having to deal with fake currency,” said a senior official.

Though it is an important component in the world of banknote security, blue paper is not a new idea. The first recorded mention of blue paper comes from Italy in the 14th century, where it was first used by artists as mounts for drawings. Over the centuries, blue paper sometimes became an alternative to white paper and was used in Europe during the 18th and 19th centuries for books.

Around the same time, manufacturers of blue paper began dyeing the paper pulp instead of using disintegrated rags which resulted in the paper achieving more intense colours.

Today, blue paper has moved from the artistic realm to the security realm thanks to this dyeing process. Because the dye is applied to the entirety of the banknote and not just to select locations on the note, the paper itself becomes a security feature and is, as researchers from the Fraunhofer Institute for Applied Polymer Research have said about notes using fluorescent dyes, “itself a component of the identification label.”

Colour is an important security feature as well. Embedding additional colour designs to the blue paper is beneficial to paper producers who specialize in anti-counterfeit devices.

Printing of the Rs500 and Rs1,000 banknotes is scheduled to get underway by August and the new notes are expected to enter into circulation by December 2010.

SOURCES:
BNet: “Blue Paper To Be used For Rs500-1,000 Notes”
The American Institute for Conservation: “Historical Manufacture and Use of Blue Paper”
Nanowerk: “Brilliant Counterfeit Protection”
Polymernotes.org: “A Paradigm Shift In Bank Note Security; Security Features in Polymer Bank Notes”