Counterfeit Deterrent Features for the Next-Generation Currency Design (1993)

• Conclusions and Recommendations from Advanced Reprographic Systems: CounterfeitingThreat Assessment and Deterrent Measures, NMAB 433-2 (NRC, 1985):

1. The potential threat to the United States currency from modern reprographic technology is great, due primarily to the expected increase in availability of high-quality color copier and scanner-printer combinations during the next five years.

2. A broadening of the counterfeiting base made possible by the availability of commercial reprographic equipment can pose an intractable enforcement problem and cause serious erosion of confidence in United States currency.

3. Timely action is needed if appropriate deterrent countermeasures to this threat are to be in place by the end of the decade.

4. The primary deterrent objectives are two-fold: (a) to discourage the growth of a new category of “casual” or “crime-of-opportunity” counterfeiters, and (b) to give the public a simple means of recognizing a reprographically attempted counterfeit. Both objectives can be achieved by use of deterrents that foil the use of advanced reprographic equipment at the source . . . .

5. Although the “crime-of-opportunity” counterfeiter will normally be defeated by a single deterrent of the above type, no one deterrent exists which can permanently thwart a determined, highly skilled professional counterfeiter. . . . any currency modification adopted should incorporate more than one type of deterrent, and the selected deterrents should be based on different technologies.

6. Since reprographic technologies—and consequently counterfeiting threats—continue to evolve, new deterrents may have to be considered at a later time. It is therefore important that currency modifications be initially designed to permit subsequent incorporation of additional deterrents without extensive redesign.

7. Advances in reprographic technologies require close monitoring and relevant research to develop alternative and improved deterrents . . . as needed.

8. Certain covert deterrents can have a very useful back-up role for verification and sorting. Other covert deterrents, as well as certain overt deterrents, could become even more useful as the economy moves towards automated currency transactions. . . .

1. Actions should be initiated at once to change the design of: United States currency.

2. For the near term, design changes should use a combination of “conventional” deterrent technologies.

3. The following deterrents are recommended for the initial change to protect the currency: security thread, localized watermark, and variable dot-pattern-generated gray-scale printing.

4. Design changes should be selected such that, if more advanced deterrents are necessary later, other deterrents can be added without substantial further alteration in design.

5. In the longer term, the following deterrents are also candidates for adoption if the present difficulties can be overcome by research: holograms, optically variable ink, diffraction gratings, multilayer paper, and other modifications of the substrate material.

6. Appreciable departures from traditional note design should not be ruled out in advance, lest the adoption of effective deterrents be thereby thwarted.

7. The currency modifications selected should take into account their potential for use in automatic change machines.

8. The development of inexpensive instrumental aids for counterfeit detection at points-of-sale, that take advantage of deterrents incorporated in the currency, should be encouraged.

9. Special emphasis should be given to the advantages associated with the control of substrate material.

10. Immediate consideration should be given to legal, procedural, sociological and law enforcement measures with the potential to deter reprographic counterfeiting.

11. Governmental research on both “low level” (overt) and “high level” (covert) counterfeiting deterrence and detection schemes, both in-house and contract, should be substantially increased.

12. An independent review process should be established to assess the effectiveness of any implemented design changes, as well as the impact of advancing technologies on the counterfeiting problem.

• Conclusions and Recommendations from Counterfeit Threats and Deterrent Measures, NMAB 433-3 (NRC, 1987):

1. Rapid developments in reprographic technology could give rise to an unacceptable level of counterfeiting activity by making high-quality reprographic systems widely available.

2. Incorporation of certain deterrents will require some modification of the design of the currency.

3. Once currency redesign is undertaken to foil advanced reprographics, it is prudent to incorporate more than a single new deterrent—preferably deterrents based on different physical principles. The probability is small that new technological developments will appear that can negate simultaneously the effect of different types of deterrents.

4. Types of deterrents recommended not only produce easily recognizable gross differences between counterfeit and genuine currency but also have the practical advantages of low cost as well as requiring little further development.

5. Exploitation of the three-dimensional nature of the substrate can produce a class of deterrents of singular power to foil counterfeiting by any means of reproduction.

1. Changes of U.S. currency design should be initiated at once to protect the U.S. public against the emergence of “crime-of-opportunity” counterfeiting as well as increased professional criminal counterfeiting that advanced reprographic methods could make possible.

2. Appreciable departures from traditional note design should not be ruled out a priori, lest the choice of counterfeiting deterrents be unnecessarily limited and the effectivenesss of the action thereby weakened.:

3. The new currency should incorporate a combination of deterrents based on different technologies.

4. The following deterrents are recommended for further development because they have characteristics compatible with use in currency and, in principle, can produce gross differences, easily recognizable by an untrained observer, between genuine and reprographically attempted counterfeit currency:

   • Most effective are security threads, watermarks, and volume-related substrate modifications.

   • Next in effectiveness are variable dot-pattern-generated gray-scale printing and complex design.

   • Optically variable inks would be less effective still.

5. Special emphasis should be given to the most effective deterrents listed above because of the advantages inherent in the use of the three-dimensional properties of the substrate.

National Research Council (NRC). 1985. Advanced Reprographic Systems: Counterfeiting Threat Assessment and Deterrent Measures(U). National Materials Advisory Board. Washington, D.C.: National Academy Press.

National Research Council (NRC). 1987. Counterfeit Threats and Deterrent Measures. National Materials Advisory Board. Washington, D.C.: National Academy Press.