After discovering irregularities in the quality and production of banknote paper, security paper maker De La Rue has suspended production of banknotes at their printing plant in Overton, Hampshire for the time being.

Though no specific details have been provided, the company said last week that the paper used for making banknotes was not being printed on par with company standards.

“It is apparent that some paper production has failed to meet certain quality specifications,” a spokesperson said in an article written for the UK’s Sky News.

The company produces banknotes for 150 countries around the world but has not confirmed that any “inferior” banknotes have made their way into circulation.

The quality of paper can play a big role in ensuring the security of a banknote in order to prevent it from being counterfeited. Unlike writing paper, for example, banknote paper is produced from different types of pulp blends.
Thus, cotton based banknote paper has a unique feel different from other papers. This feel is considered to be a trigger, leading people to know whether or not the banknote is fake.

Banknote paper is also the first place producers go to include security features. Intaglio printing (raised printing) is embedded on the paper allowing consumers to instantly recognize whether a banknote is genuine by simply examining its tactile functions.

Details about how long the plant was producing inferior paper are not known. Other banknote producers around the world are not reporting any problems with the quality of their outputs.

In addition to banknotes, De La Rue also supplies security documents such as passports, authentication labels and fiscal stamps, but has not said there was a problem with these products.

SOURCES:
Sky News: “Printing Error May Undermine Banknotes”
This Is Money: “Banknote Production Suspended Due To Paper Flaws”
Polymernotes.org: “Mould-made cotton bank note paper and plastic substrate alternatives”

The Pixel Watermark not only produces different shades, it also makes the images - like this angel's wing on a commemorative Mexican 200-peso not - appear 3D

This article is part of a continuing series that looks at security features in development for the security paper industry.

One of the most familiar – and recognizable – banknote security features is the watermark. First introduced in the 13th century in Italy, a watermark is an image or pattern on the security paper that appears as various shades of lightness/darkness when held against the light.

A watermark can take many forms, but some of the more identifiable marks are usually found elsewhere on the bill. The Canadian $20 bill, for example, features a watermark which is a smaller version of the note’s portrait of Queen Elizabeth II, while the new American $100 bill’s watermark is a smaller portrait of Benjamin Franklin.

Despite the fact that watermarks are one of the most common security features for banknotes, and one of the most effective anti-counterfeit devices, some countries have taken watermark technology a step further to prevent currency forgery.

In 2009, the Bank of Mexico was the first to introduce the world to a new watermark called the Pixel Watermark. Consisting of patterns of dark dots of varying sizes on light backgrounds, the Pixel Watermark sets itself apart from regular watermarks in that the colouring of the pixels in the image creates an almost 3D effect.

Though the first bill to feature the Pixel Watermark was a commemorative 200-peso note, countries in Asia and Latin America have since adopted the security feature.

And the Pixel Watermark is picking up steam elsewhere. Recently, the security device won the award for the Best New Currency Feature at the 2010 Excellence in Currency Awards held in Buenos Aires. The watermark beat out other high-tech, new-to-the-industry security features like the Depth Image, a 3D hologram with strong colour switching and contrast.

SOURCES:
Currency News: “2010 Excellency in Currency Award Winners”
“Watermark”
Banknote News: “Pixel Watermark Debuts on Mexico 200-Peso Commemorative”
Bank of Canada: “Security Features”
Personal Money Store: “New 100 Dollar Bill Debuts To Help Fight Counterfeit Rings”
“Depth Image Hologram”

Fortress Paper President & CEO Chad Wasilenkoff appeared live on Bloomberg Television this week to talk about the future of money.

From the technological advances in security features, to the composition of a new banknote series, to the continual need for bills around the world, Wasilenkoff highlights the importance of turning paper into cash in this interview.

Watch the video:

All banknotes are intricately designed with particular pictures, security features and unique stories.
This article posted on CNNGo.com takes a closer look at seven of the most interesting intricacies of Asian currency.

Funny money: The wacky world of Asian currencies
by La Carmina @ CNNGo.com

#1- India: Thumbs-up and peace sign rupees

India’s one-rupee coin has an image of a hand giving the thumbs up. On the two rupee, the fingers form a peace sign. These coins were designed with the blind in mind, but they’re also useful for the numerically illiterate (just count the fingers.)

#2 – Hong Kong: Plastic dollars
Plastic money is no longer a nickname just for credit cards. In July 2008, Hong Kong issued bright, high-detail HK$10 bills made from polymer, potentially making dirty money a thing of the past: these notes can be washed with water and even soap.

#3 – China: Fake and real Chairman Mao yuan

In China, counterfeit bills sometimes slip into circulation, like the topmost 100-yuan bill. How to tell? Rub Mao Zedong’s jacket. The genuine note has ridges while the fake one is smooth. The black line is also more pronounced on the real deal.

#4 – Indonesia: Big money rupiahs

Quite a few visitors to Indonesia will have spread out their freshly-exchanged currency and rolled around in it, squealing “I’m rich!” It’s not unusual for locals to carry around millions of rupiah. Too bad a 50,000 bill is worth a paltry US$5.

#5 – North Korea: “The Eternal President” on three denominations

North Korean money lives up to the country’s topsy-turvy reputation. Visitors are issued a separate currency: Red banknotes for socialists and green ones for capitalists. The national system is just as confusing. The 100, 1,000 and 5,000 won bills have the exact same Kim Il-Sung design, only in different colors.

#6 – South Korea: Controversy over a historical armillary clock

In 2007, the Bank of Korea released 10,000 banknotes with a Joseon dynasty astronomical clock on the back. Historians went up in arms because the image depicted a similar invention, the Chinese honchonui, and not the 17th century Korean honchonsigye. The bank dismissed their demands for a re-design as nitpicking.

#7 – Macau: The Motherland stakes its claim

Macau was a Portuguese territory until it was handed back to China in 1999. Although Banco Nacional Ultramarino currency is still legal tender, China flexed its muscle by issuing four million 20-pataca banknotes that commemorate the 2008 Beijing Olympics. The press release explains: “In this way, citizens of the MSAR are able to share the joys of hosting such a magnificent international event by the Motherland.”

SOURCE:
CNNGo.com: “Funny money: The wacky world of Asian currencies”

North Korea's won has rapidly depreciated to Chinese traders

Nearly a month after North Korea redenominated its currency at a rate of 100 to 1 (read North Korea changes currency and rates 100 to 1), North Korea changes currency and rates 100 to 1), its international value has also begun to plunge.

Reports from South Korea’s Yonhap news agency this week stated the new North Korean currency was trading in neighboring China at a rate of 1,000 won for 1 yuan (the Chinese currency).

Shortly after the currency shift in early December, Chinese trade rates were steady around 50 to 1. Since then, the value of North Korean won has been rapidly depreciating.

The government of North Korea cited the country’s decade-plus run of economic hardship and increasing evidence of runaway inflation as their reason for redenomination, though many critics agree it was a direct attack on emerging private markets.

Citizens were only given one week to exchange their old currency for new currency in December, and were only permitted to exchange 150,000 won regardless of how much won they owned or had saved.

On New Year’s Day, North Korea banned the use of any international currency within its borders.

SOURCES:
AFP: “North Korea banknotes plunge in value: report”
Argentina Star: “North Korean banknotes find no favour with locals”

The zero banknote looks identical to Indian banknotes, though it has no worth.

Fifth Pillar, an Indian charity that confronts corrupt officials, has issued a zero banknote as a way to protest ongoing bribery and extortion in the country.

The notes have no value, but look identical to Indian banknotes and carry the slogans “Eliminate corruption at all levels” and the pledge “I promise to neither accept nor give bribe.”

“The note is a way for any human being to say no to corruption without the fear of facing an encounter with persons in authority,” the charity said in a statement.

Indian citizens are often faced with corruption when they are forced to pay cash bribes for everyday tasks like registering cars or homes, and getting Internet connections hooked up.

Fifth Pillar claims £3 billion is paid each year in bribes in India, but insiders believe the figure is considerably higher, and that several leading politicians have become billionaires through corruption.

The idea for the zero banknote came from an Indian physics professor at the University of Maryland in the US who says he “was sickened by the corruption he witnessed in India and wanted to give people the means to protest against the bribes they were expected to pay. “

Fifth Pillar’s president Vijay Anand took up the professor’s idea of a banknote which had no value, producing 25,000 notes initially, their popularity leading to the production of one million more notes. And the simple protest is catching on.

The World Bank blog tells the story of an elderly woman who was being bribed to obtain documentation of a land title and instead handed the Revenue Department official one of Fifth Pillar’s zero banknotes. “Remarkably, the official stood up from his seat, offered her a chair, offered her tea and gave her the title she had been seeking for the last year and a half to obtain without success,” the blog reports.

Though commonplace, bribery is a crime that is punishable with jail time in India. The World Bank says these zero banknotes are effectively making a strong statement condemning bribery. By providing the support of an organization, Fifth Pillar has given citizens the courage to stand up and no longer be afraid of the criminal practices.

“For people to speak up against corruption that has become institutionalized within society, they must know that there are others who are just as fed up and frustrated with the system,” says the World Bank on their blog. Once they realize that they are not alone, they also realize that this battle is not unbeatable. Then, a path opens up—a path that can pave the way for relatively simple ideas like the zero rupee notes to turn into a powerful social statement against petty corruption.”

SOURCES:
Digital Journal: “Indian charity issues worthless banknote to highlight corruption”
Telegraph: “India ‘issues’ zero rupee banknotes”
The World Bank: “Paying zero for public services”

Benjamin Franklin wasn't only a founding father of the United States, he was also a founding father of anti-counterfeiting devices on banknotes

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

In the world of currency, developing anti-counterfeiting measures have always followed the emergence of counterfeit banknotes and coins, and they have taken on many different forms.

As seen in the previous article in this series, (read: Part 1: A History of Counterfeiting), one of the earliest attempts to deter counterfeiters was blatant threats. When paper money debuted in China during the 13th century, the notes were emblazoned with a slogan reassuring prospective criminals that counterfeiting carried with it the threat of death.

Other strategies to prevent counterfeiting often included creating currency in a very unique way, with very unique tools.

In ancient Rome, for example, craftsmen struck coins, and did not cast them in molds therefore detail to the coins could only be provided by the talented smiths.

In the age of paper money, printers developed special typefaces and type ornaments, sometimes cut by hand, in the hopes that counterfeiters would find it too expensive to reproduce the banknotes.

But soon, with more and more people worldwide having access to a printing press, counterfeiting became not only easier, but also more professional.

By the eighteenth century, particularly in America, anti-counterfeiting measures were on the rise. In 1739, Benjamin Franklin devised a series of banknotes that included realistic images of three blackberry leaves and a willow leaf. The leaves, as historian Eric P. Newman wrote, “not only had exceedingly complex detail but also internal lines that graduated in thickness.”

However, a larger problem permeated the American currency system in its first 100 years. In its infancy, America had about 1600 state banks that designed and printed their own bills. Each bill carried its own design, but the country saw nearly 7000 varieties of bills circulating. In 1862, a national currency was adopted as an attempt to prevent the counterfeiting of these bills that were sometimes unrecognizable even between states.

Some three years later, the United States Secret Service was established with a primary purpose of suppressing wide-spread counterfeiting. Throughout the early 20th century, some security features were added to banknotes, including watermarks, seals, serial numbers, and colored inks.

Anti-counterfeiting technology has been developed more over the past 30 years than in the history of money.

From polymer, security threads, iridescent strips and see-through windows, today’s banknotes are not just used as currency; they are also becoming high-tech anti-counterfeiting devices.

In the final installment of this series, we will look at some of the latest developments in banknote security measures.

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

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”

Nearly 200,000 counterfeit euro20 banknotes were seized in the last six months says the European Central Bank

The European Central Bank (ECB) announced today that the number of fake euro banknotes seized in the last six months rose by eight per cent from the first half of the year.

“In the second half of 2009 a total of 447,000 counterfeit euro banknotes were withdrawn from circulation,” an ECB statement said.

Though the increase is significant, ECB officials say it is a step up from the first half of 2009, which saw a 17 per cent increase in seized counterfeit notes.

The most frequently forged bills were the euro20, which accounted for 47 per cent of the fakes, and the euro50, which accounted for 39 per cent.

The euro contains many security features that attempt to foil counterfeiters. Specific watermarks, security threads, hologram foil stripes & patches, iridescent stripes, and colour-shifting inks all play their part in deterring the reproduction of fake notes.

Though the ECB’s statement demonstrated concern at the growing ability to produce successful counterfeit euros, the Central Bank also remained steadfast in believing it was a manageable problem.

“When compared to the 12.8 billion genuine banknotes in circulation,” the ECB statement said, “the proportion of counterfeits is still very low.”

Nearly one million counterfeit euros were seized and withdrawn from circulation in 2009.

SOURCES:
Chicago Sun Times: “Amount of counterfeit euros up.”
“Fake euro seizures rise by 8%: ECB”

In response to the increasing circulation of banknotes scribbled with anti-government slogans (read Iranians shift protest movement to banknotes), the Central Bank of Iran said this week that it would no longer accept graffitied banknotes as valid currency.

Since the beginning of the Iranian Green Movement (the ink on the banknotes is often green, and the colour symbolizes the official colour of the opposition), the government has been struggling to deal with the rise of this covert protest movement.

At the beginning of December, The Pro-Democracy Movement of Iran deemed the Green Movement a success saying, “the Central Bank of Iran has tried to take these banknotes out of circulation, but there are just too many of them.”

The Central Bank is now telling people to exchange their graffitied banknotes for “clean” notes by January 8, 2010. After this period, any banknote with writing on it will be considered invalid.

The slogans on the banknotes oppose the recent reelection of Iranian President Mahmoud Ahmadinejad in what many, including Iranian reformist leader Mir Hossein Mousavi, have deemed a “rigged election” at the hands of the government.

Since June, banknotes have been in circulation with messages like “In this country, only the government has freedom of speech. Don’t believe anything you hear,” “Khanmenei the dictator, Ahmadinejad the puppet” and “Death to the Dictator.”

The Green Movement has also reverted to other subtle protest tactics like spray painting on walls and using a rarely observed religious holiday for a three-day strike.

SOURCES:
Bloodwars Magazine: “Iran Bans Graffiti on Banknotes
Banknote News: “Iran to Withdraw Notes with Opposition Slogans.”
Pro-Democracy Movement of Iran: “Iranian banknotes uprising”