According to an article published by RT.com, central banks throughout Europe are preparing contingency plans evaluating their needs for additional printing capacity should the euro – a singular currency shared by seventeen countries – come to an end.

The Central Bank of Ireland, for example, is assessing the capacity of their banknote facilities where they currently manufacture new euro bills. Last year, Ireland printed 127.5 million 10-euro notes.

“The bank’s printing capacities may not meet demand should the country need to come up with a hasty replacement for the euro,” RT.com said. “Officials are discussing reactivating old printers or
enlisting a private contractor to do the job”

Last week, in a segment that aired on PRI’s The World, banknote manufacturers and economists also said the industry could see some increased businesses if the euro collapses.

But it’s not all good news. A source from the Bank of England told the Wall Street Journal they were “concerned that if the eurozone unravels, the plant would be overwhelmed with orders and would not be able to print pounds. Britain is reportedly considering steps to ensure that such contingency would not cause damage to the UK’s own interests.”

Among other countries, Switzerland, Montenegro, Bosnia and Latvia are all beginning to look at post-euro plans should the currency bloc fail. To do that, RT reports, “they are now casting around for a new reference point – probably the German mark.”

SOURCES:
RT.com: “Plan B: Printing Presses on Standby To Beat Euro’s Demise”
PRI’s The World: “Making Money by Making Money”

Some simple measures for verifying the authenticity of the new notes include:

- checking for the unique feel of the banknote paper and the raised print on the notes
- looking for the metallic thread that appears as silver dashes on the front of the note, which appears as a continuous dark line when held to the light
- identifying the watermark of the Queen’s portrait
- verifying that printed lines and colours on the notes are sharp, clear and free from smudges or blurred edges
- finding the hologram on the foil patch that, when tilted, changes between a brightly coloured picture of Britannia and the numerical value of the note
- placing the note under an ultraviolet light where the value appears in bright red and green numbers against a dull contrasted background
- using a magnifying glass to look for microprinting located beneath the Queen’s portrait that spells out the value of the note.

The new £50 note features the portraits of entrepreneur Matthew Boulton and engineer James Watts – a duo that pioneered the use of steam engines in textile manufacturing during the 18th century. This marks the first time in the history of UK banknotes that two portraits will be featured on the back of the note.

This redesign also marks the first time since 1994 that this particular note gets a new look.

The £50 banknote is one of the most commonly used notes in circulation, according to BBC news.

SOURCES:
The Telegraph: “How To Spot A Fake Banknote”
BBC News: “New £50 Note Set For 2 November”

The new note will feature the portraits of entrepreneur Matthew Boulton and engineer James Watts – a duo that pioneered the use of steam engines in textile manufacturing during the 18th century. This marks the first time in the history of UK banknotes that two portraits will be featured on the back of the note.

This banknote will also be the first note signed by Chris Salmon, who was appointed as the Bank of England’s Executive Director of Banking Services and Chief Cashier earlier this year.

The Bank said the new £50 banknote will contain a range of new security features, but, according to British media sources such as BBC and The Independent, it will not release any more details until the note enters into circulation next month.

The £50 banknote has not been redesigned since 1994. That particular banknote, which will remain in circulation until its eventual withdrawal, features the portrait of Sir John Hublon, the first Governor of the Bank of England.

This denomination is one of the most commonly used notes in circulation, according to BBC News.

“There are 210 million £50 notes in circulation, valued at £10.5bn. That is 84% higher than 7 years ago,” they reported. “The £20 is the most common Bank of England note in circulation, with 1.55 billion notes in circulation worth £31bn. “

SOURCES:
BBC News: “New £50 Note Set For 2 November”
The Independent: “New £50 Note To Be Introduced In November”
IBN Live: “UK To Introduce New 50 Pounds Note”

The £5 banknote is the most likely candidate to be switched first as it is the lowest denomination and therefore the most frequently used, however the Bank has also said they would conduct test runs with £50 banknotes as well because they are the most frequently counterfeited.

Polymer banknotes are considered to be more durable than cotton-based notes, and provide unique opportunities for embedded security features.

“The Bank is look at ways of putting a see-through transparent window on [the new] notes as a primary security feature,” reported The Independent.

The decision to switch those notes to polymer hasn’t been set in stone. The Independent reports that a source close to the Bank said this project was still in “the evaluation stage” and that “a decision won’t be made for the next year or two.” If the plan goes ahead, the first polymer £5 banknotes could make their way into circulation by as early at 2013.

This isn’t the first recommendation the Bank of England has issued with regard to the £5 banknote. Last year, the Bank moved – at the request of merchants and consumers – to increase the amount of £5 banknote in circulation since they are the most frequently used bill in Britain. Since then, the Bank has churned out an extra 400 million £5 notes.

SOURCES:
The Independent: “British Bank Notes Set For Plastic Surgery”
Global Paper Security: “Britain To Increase £5 Banknote Output”

The move comes after a rather successful year-long pilot project undertaken by HSBC to increase the number of automated teller machines (ATMs) that distribute £5 banknotes (read more about that here)

Earlier this year, the Bank of England said the smaller denomination was beginning to fall out of circulation because consumers considered the “fiver” small change, due to its lack of use in everyday consumption.

The Bank of England said the new level of outputs should dramatically increase the number of £5 banknotes in circulation, and reinvigorate its usage.

“By Easter next year, the number of £5 notes dispensed from ATMs should have increased five-fold,” Bank of England Governor Mervyn King said. “In addition, some other large retailers are also working to increase the number of £5 notes they give out as change.”

British business leaders have been lobbying the country’s central bank for an increase in smaller denominations for some time now claiming that “those who frequently use cash dispensers who don’t want ‘to carry higher-value denominations, especially £20 notes, around in their purses and wallets.’”

These same business leaders said that “despite credit and debit cards, small-ticket items are [still their] lifeblood,” highlighting a continual need for banknotes not only in England, but the world over.

In total, the Bank expects that an extra 400 million £5 notes will enter into circulation each year.

SOURCES:
My Finances: “Popular £5 Notes Availability To Increase”
The Daily Mail: “£5 Notes To Be Available From Cash Machines”
Global Paper Security: “British Business Leaders Demand More Ten Pound Banknotes”

The Bank of England says the £5 was beginning to fall out of circulation because many people now consider the denomination to be “small change.” As a result, a bank source told UK’s The Daily Mail this week, the five pound notes end up “being stuffed into people’s back pockets, rather than returned to banks in the form of deposits” and therefore not a likely candidate for ATMs.

Last year, in conjunction with HSBC, the Bank of England launched a pilot project asking street lenders to stock more of the notes and are beefing up the project this summer with their focus on ATMs.

According to the Daily Mail, “In the early 1990s, just 25 per cent of cash was withdrawn using hole-in-the-wall machines, but their use has exploded and ATMs now dispense around 70 per cent of all cash in circulation. But as banks prefer to dispense larger denomination notes from their cashpoints, the fiver has suffered in comparison.”

This isn’t the first time England has sought more lower denomination bills to be introduced into circulation. As we wrote back in November, British business leaders urged the Bank of England to increase the number of £10 claiming that “those who frequently use cash dispensers who don’t want ‘to carry higher-value denominations, especially £20 notes, around in their purses and wallets.’”

These same business leaders said that “despite credit and debit cards, small-ticket items are [still their] lifeblood,” highlighting a continual need for banknotes not only in England, but the world over.

SOURCES:
The Daily Mail: “£5 Notes To Be Available From Cash Machines”
The Daily Mail: “Give Us More Tenners, The Bank of England is Urged”
Global Paper Security: “British Business Leaders Demand More Ten Pound Banknotes”

New Jersey issued this six-pound note in 1761, during the French and Indian War. It warned "To counterfeit is Death," because counterfeiting was deemed a capital offense. Courtesy History.org

*This article is the first in a three-part series on counterfeiting.

The act of counterfeiting is as old as money itself. Plaguing ancient Rome, empirical China, newborn America, and many other nations over the past 2500 years, the illegal activity came hand in hand with the creation of money.

Even prior to the invention of coin and paper currency, counterfeiting was a popular form of trickery. In Prehispanic Mexico, for example, Cacao traders would extract the contents of the bean and substitute the valuable innards of the plant with soil.

In the ancient world, of course, currency was invented hundreds of years before these Mexican ruses. Real currency made its debut in the form of coins around 700 B.C. and counterfeiting soon followed. Coins had not yet been marked or etched with images or slogans, so reproducing coins out of less valuable metal was easy.

The problem became so severe in places like ancient Rome, that “it was considered treasonous and punishable by death if the perpetrator was caught. This was because many believed that anyone who disturbed the market with fake money was putting the nation’s economy and its general stability and strength in serious jeopardy.”

Those sentiments were echoed by the Chinese upon the invention of paper money, which appeared on the global currency scene during the Yuan Dynasty in the 13th Century. In order to prevent counterfeiting, “the Emperor ordered that the following be printed on all banknotes: ‘Counterfeiting shall be punished by death. Informers shall receive 250 taels of silver and the criminal’s property.’”

Throughout history, however, counterfeiting has not only come at the hands of criminals. The British government “produced large quantities of bogus assignats to undermine revolutionary France,” and helped the process of devaluating “Confederate paper money by printing it themselves and sending it to the South” in pre-revolution America to the point where Confederate banknotes were almost worthless.

By the end of the eighteenth century, counterfeiting was flourishing. During the Civil War, “one-third to one-half of the currency in circulation was counterfeit.”

Coin counterfeiting had become so advanced in the United States that “when the first federal coins were issued by the US government in the 1780s, they had the dies cut by an ex-counterfeiter in order to deter the practice.”

Paper money in the US was also being easily counterfeited because of merchants’ inexperience with the currency. One historian explains: “Rural colonists were not very familiar with paper money because their daily lives did not revolve around commercial transactions; furthermore, they had a deep prejudice against it because they did not regard it as ‘real’ money. Because merchants lacked familiarity with authentic paper money, they could be fooled by some surprisingly amateurish counterfeits.”

Though anti-counterfeiting measures were being developed throughout the world by the nineteenth century – particularly in America – counterfeiting continued.

One of the most professional cases of counterfeiting was carried out by the Germans in World War II who “had control of expert counterfeiters imprisoned in the Sachsenhausen concentration camp, and even manufactured very convincing paper, which can be more difficult to forge than a banknote’s appearance.”

The counterfeits produced by the Germans in the first half of the twentieth century were so good in fact that when The Bank of England managed to obtain some falsified British pounds, they said “the only way in which [the fake banknotes] differed from the real thing was that the real thing wasn’t as good.”

Today, thanks to modern advances in scanning and printing technology, counterfeiting paper banknotes is perhaps easier than ever. Because of this, security features are becoming an – if not the most – important part of banknote design.

In Part 2 of Counterfeiting: A Three-Part Series, we will take a look at the history of security features and identify how different security features have evolved over time to prevent counterfeiting.

SOURCES:
“History of Counterfeit Money”
“A Short History of Money”
“History of Counterfeiting”
“History of Counterfeiting”
“The History of Counterfeit in Russia”
“The Golden Age of Counterfeiting”
“History of Counterfeiting in Mexico”

The UK paper reports that the outcry for the demand of ten pound notes is coming mainly from small shops where “despite credit and debit cards, small-ticket items are [still their] lifeblood,” and from those who frequently use cash dispensers who don’t want “to carry higher-value denominations, especially £20 notes, around in their purses and wallets.”

In the UK, like in Canada, automated teller machines (ATMs) often only distribute higher denominations like twenty pound/dollar notes “because banks can cut costs if they don’t have to refill them so often.” A whopping 70 per cent of banknotes in circulation in England are withdrawn from ATMs.
The Bank of England, however, has said there is no shortage of any notes in any denomination.

SOURCE: Give us more tenners, the Bank of England is urged

Read more: http://www.dailymail.co.uk/news/article-1227874/Give-tenners-Bank-England-urged.html#ixzz0X43bK3C1

Posted By: T. Murphy