Not Just Paper and Ink: The Complex Technology Behind Banknotes 

by Sachin

Spanish national and regional police seized 4.3 million euros in 500€ banknotes with the help of Europol on September 21st, 2022. They recovered the equipment used to make the counterfeit money and twelve people were arrested. Europol noted that “The advanced technological design and the good condition of the forgeries make these the most dangerous counterfeits produced in the EU in recent years.”  

The news comes in contrast to a press release from the European Central Bank (ECB) announcing that the proportion of fake euro banknotes in circulation in 2022 was at its second lowest since the euro was introduced. They say that only “13 counterfeits were detected per million genuine banknotes in circulation” in 2022.  

Counterfeiting banknotes has been around since money in the form of paper and ink first appeared. And yet, the EU has seen a decrease in fake euros. One explanation for this is that technology has transformed traditional paper (actually a blend of 75% cotton and 25% linen) and ink banknotes from what they once were. As Astrid Drexler, Product Manager of Banknotes at G+D, observes, “Only the combination of more complex, more advanced technologies, coupled with a striking design, allows us to offer maximum security for every banknote denomination.”  

For companies to survive and thrive in the security printing industry, they must be on the cutting edge of technology and invest serious time and money into research centers and innovative engineers. Their clients, the central banks that order printed banknotes for their currencies, expect highly sophisticated, carefully crafted, secret technology that is at least one step ahead of the inventive and increasingly professional counterfeiters. 

Centuries of Innovating 

China became the first country to print fiat currency in 1120 and included the following inscription on their bills: “Those who are counterfeiting will be beheaded.” But it wasn’t until 1661 that the first banknotes in Europe were issued by the Bank of Stockholm. To instill confidence in the money, at least 16 trustworthy officials signed each banknote by hand!   

Other governments and merchants began issuing paper money, but because early engraving was rather basic, banknotes were widely copied. One of the first major innovations came in 1840 when the American Banknote Company (ABC) assembled renowned engravers to design and etch different parts of each banknote plate, thus making the plates difficult to replicate.  

The next big innovation came in 1948 when Great Britain issued banknotes with metallic threads inserted in the paper. In response, counterfeiters drew black lines on their notes which generally did the trick as long as the lights were dim. Polymer-based banknotes were first introduced in 1988 in Australia with hopes that they would be harder to forge. However, their use has remained limited because polymer has not proven to be better than cotton-based banknotes.   

Since these early innovations, security printers, governments, and law enforcement agencies have worked together to ensure that today’s seemingly simple paper and ink banknotes are so complex that acceptable counterfeits are nearly impossible to make. In fact, high-denomination notes contain up to fifty different anti-counterfeiting elements: some are obvious, and others are highly-guarded secrets.  

Today’s Tech for 3-Second Decisions  

A recent study of how long it takes for different people to decide whether or not to accept a banknote found that most cashiers make a decision within just three seconds. Waiters take even less – just one to two seconds. That is why many innovations focus on visual authentication features that help people recognize within three seconds whether a banknote is real or not.  

One such visual security innovation comes from Crane Currency, the company that has been supplying the paper used for U.S. banknotes to the US Bureau of Engraving and Printing (BEP) since 1879. The BEP does most of its own security R&D in-house, but Crane added new motion technology into the latest $100 bills. In 2020, the company brought BREEZE™ to the market. It is a micro-optic security thread specifically designed for low-denomination notes that combines high-contrast colors with high-speed and fluid movements that are easy to see and verify quickly. The company emphasizes that, unlike color-shifting films, their micro-optic technology is not commercially available.   

 Quickly and effectively authenticating banknotes has also gotten easier with innovative technology from Oberthur Fiduciaire, a French security printer. The company explains that its new RELIEF™ 3D security threads “work by stimulating the observer’s senses to perceive a visual tactility that does not exist – a highly memorable feature, which appears to the user as an intriguing and elegant trompe l’oeil.” Whereas Pulsar™ is a color or color-shift thread that uses innovative, integrated micro-optics to make dynamic, moving visual effects. Oman’s 1 Rial was the world’s first banknote to feature this new thread technology – a design that won the banknote award for Best New Series at the 2022 High-Security Printing EMEA forum. 

In order to stand out in a competitive industry and dissuade forgeries, Thomas Savare, CEO of Oberthur, says, “Many printing skills, finishing skills, and design skills are needed, besides growing R&D activities, all of which develop new security features to adapt new techniques and new processes, to enhance the security and the durability of banknotes.” It is in this pursuit that Oberthur Fiduciaire has recently become the majority stakeholder of Rolling Optics, a Swedish company that uses 3D effects to supply “the most secure visual anti-counterfeit solution in the world.” 

The Euro Gets a Makeover 

The various skills and security innovations of the world’s top banknote producers will soon be put to the test. In December 2021, the ECB announced that it would be using input from the public to redesign euro banknotes with a final decision by 2024. ECB president Christine Lagarde said that “After 20 years, it’s time to review the look of our banknotes to make them more relatable to Europeans of all ages and backgrounds. They are a tangible and visible symbol that we stand together in Europe, particularly in times of crisis, and there is still a strong demand for them.” 

The ECB says the main motivation behind redesigning the euro is a desire to make banknotes more relatable and identifiable as “European”. But they also know that while the proportion of counterfeit euros has been very low thanks to security features being regularly added to euro banknotes, this redesign offers the opportunity to include additional, sophisticated visual technology.     

Counterfeiters have had 20 years to figure out how to replicate the look of today’s euros. The race is now on between banknote manufacturers to propose innovations for the redesign that will make euros pretty much impossible to accurately counterfeit and that also meet aesthetic demands. To make that happen, the ECB knows that it can rely on the continued quality and excellence of leading European companies in the industry such as Oberthur and G+D.  

Banknotes: Complex, Technological Masterpieces 

Images that come to life on banknotes are a far cry from when the Chinese first used paper and ink for financial transactions almost 1,000 years ago. Centuries later, we are still using the same basic foundation, but today’s seemingly simplistic banknote is actually a showcase of innovation and technology from the world’s small pool of security printers.  

Every single element of each banknote that changes hands has been carefully researched, designed, and executed, requiring security printers to be masters over the whole process. And thanks to ongoing efforts from the industry’s leaders to develop new security innovations, counterfeit banknotes that pass the three-second test are very rare and extremely difficult to make.  

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