In an age when online banking, electronic transfers, RFID-based payments, and digital currency are becoming exponentially popular among consumers, “paper” money can seem like an antiquated technology. But the truth is physical currency isn’t going anywhere for a long time. Yet the ease of obtaining high quality scanners, printers, and powerful graphics software allows for paper money to be easily counterfeited. Currently, less than 1 percent of U.S. currency is fake. Canada, however, experienced a crisis in 2003-2004, when counterfeiting skyrocketed 12 times the industry standard to become the sixth largest crime. In response, the Bank of Canada has developed a new polymer-based currency that is secure and durable with state of the art features. These advances will help make physical money become more high tech even as it maintains its status of “old tech”.
Lets take a look at how Canada revamped its physical currency as the never ending arms race against counterfeiting continues.
In designing the new currency, the polypropylene substrate called Guardian® manufactured by Securency International of Australia was chosen because of its success in a number of other countries. This material makes it time consuming and costly to counterfeit. It has the added advantage of being easier for the public to recognize a fake. Additionally, the polymer bills last 2.5 times longer than paper-based money and can be recycled.
The chart above shows the cool security technology used to make these notes. For instance, the raised ink of the large number and main portrait means that you can swipe your finger across the surface to check authenticity. Polypropylene is transparent, so the currency was designed with two windows: one that contains a metallic portrait and building with a holographic foil and tiny numbers and the other is a maple leaf window that contains hidden numbers seen by viewing the center of the leaf with a single-point light source. While portraits of Canadian prime ministers will be standard for notes, the $5 denominations released in 2013 will celebrate Canadian science with such images as Canadian robots on the International Space Station.
A snazzy video profiling these features can be seen here:
The Canadian banknotes are the most technologically advanced physical currency to date thanks in large part to the new polymer substrate. Some of the security features have become common, such as raised ink and holographic elements present in paper-based British notes and the Euro. Others, however, are due to the substrate itself. The transparency of polypropylene enables the notes to have windows instead of using watermarks common in currency, including U.S. bills. Furthermore, this feature allows anyone to check for the hidden numbers in the maple leaf by holding the note up to a light. This is far superior to the standard UV light-detectable features used in numerous countries. Ultimately, banks are simply trying to stay ahead of the technology curve and introduce better ways of spotting fakes. That’s why making it easier for the public to spot counterfeits is probably the best technology advance of any of the ones mentioned above.
With all the technological progress due to the Internet and microelectronics, it is hard to imagine a world without physical currency, even if you lack Orwellian delusions of government control and the implementation of a chip in your hand. While some may argue that physical money serves merely as a safety blanket for people, electronic and digital currency have their own sets of problems that do not make them foolproof. Considering the recent 50-day hacking rampage by Lulzsec on Sony, the FBI, and various government websites, it appears that online security may be more wishful thinking than many companies, including banks, would like to admit. And that’s why physical currency, and therefore counterfeits, will have a place in the future. For all the efforts of banks around the world to come up with these innovations, technology makes it increasingly easy for people to jump into the counterfeiting game. Though it used to be an American problem, counterfeiting is on the rise in China and Europe. In fact, one person producing fake 20 British pound notes is believed to still be at-large after 15 years of cranking them out. Switching to a polymer currency is smart, but it is only a matter of time before someone figures out how to use something like a low-cost 3D printer to counterfeit the polymer banknotes.
But is paper money really going out of style? For all the electronic forms of currency that Americans have access to today, the Bureau of Engraving and Printing shows no signs of slowing down production. In fact, over the last few years, the number of bills printed has decreased from 38 million per day to 26 million, but higher denominations are being produced as part of the actions of the Federal Reserve in response to the recession, with almost 10 times the number of $100 bills being printed in 2010 compared to 2001. Whether paper money is actually being scaled down at the printers won’t really be revealed until currency production returns to a sane level.
The future of physical money will inevitably involve increasing the sheer number and complexity of security features that can fit onto a two-dimensional handheld sheet. The advantages of polymer-based currency are clear, so it wouldn’t be surprising if the U.S. starts seriously considering them, even if they may double the cost of printing money. Many other countries are adopting these security features with each new currency iteration. And then there’s the chatter about the incorporation of RFIDs into banknotes, a popular conspiracy theorist topic. It is likely only a matter of time that they are found in money considering how small RFIDs can now be produced. If the idea of someone being able to track your money bothers you, buy gold – no one will ever find that.