A Path to the Next Generation of U.S. Banknotes Keeping Them Real (2007) / Chapter Skim
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1 Background and Motivation for the Study
1 Background and Motivation for the Study
Pages 5-21
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From page 5... ...
The committee found that developing a good understanding of these issues -- see Box 1-1 on the committee's work process -- was an essential foundation (1) to its efforts to identify technologies, both existing and emerging, that pose the most significant counterfeiting threats to Federal Reserve notes (FRNs)
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From page 6... ...
Because the counterfeit notes that the committee saw were in most cases passed and then ultimately detected, their makeup indicated which features are apparently important and which are generally ignored during note authen tication. Observing passed counterfeits reinforced the committee's sense of the need to design notes with counterfeit deterrence in mind.
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From page 7... ...
The value of the transactions handled by electronic financial networks dwarfs the cash economies of the world.2 Thus, the counterfeiting of electronic forms of money and its use for criminal purposes is an urgent and strategic issue for modern law enforcement. However, it is not the focus of this report, which addresses the counterfeiting of physical currency, specifically, FRNs.3 The modern world is still far from being a cashless society.
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From page 8... ...
The Task Force makes its recommendations to the Advanced Counterfeit Deterrence Steering Committee, also composed of representatives of the Treasury Department, Federal Reserve, Secret Service, and BEP. The Steering Committee then makes recommendations for the new design and security features to the Secretary of the Treasury, who has the statutory authority to approve such changes.
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From page 9... ...
For hundreds of years, counterfeiting had required considerable artistic and technical skill, as well as substantial resources. Until recently, the primary counterfeiting threat arose from organized professional criminals and, in a few instances, from hostile states.
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From page 10... ...
These systems also provide additional opportunities for professional counterfeiters.4 These studies identified potential counterfeiting threats posed by technologies that primar ily replicate the visual appearance of banknotes. Until recently, most casual counterfeiters have focused on reproducing the visual appearance of a banknote while using primitive methods to replicate other features, such as the banknote's tactile properties.
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From page 11... ...
banknotes more carefully than do U.S. cash handlers, the annual dollar value of passed counterfeit notes reported abroad is constant and small, although a precise number is not reliably measured.12 The high scrutiny paid abroad to U.S.
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From page 12... ...
currency in more detail. The total dollar value of domestically passed notes is around $40 million to $50 million annually and has been approximately constant over time.16 Because Federal Reserve machine readers capture all counterfeits that pass through Federal Reserve banks, this number is a good lower bound of the counterfeiting activity 14 L
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From page 13... ...
The counterfeiting threat is a system composed of several processes that combine to influence the amount of counterfeit notes in circulation. Understanding and addressing the growing complexity of technologies used to produce, to verify, and to counterfeit FRNs require an integrated model that permits a synthetic view and analysis of the application of new technology not only in the creation of counterfeit notes but also in their detection, their removal from circulation, and the identification of their sources.
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From page 14... ...
The second report to the Congress by the Secretary of the Treasury, in consultation with the Advanced Counterfeit Deterrence Steering Committee, pursuant to Section 807 of Public Law 104-132. Available at |
From page 15... ...
Experts report that counterfeit notes are often identified by their poor and uneven wear.25 24 Some home insurance policies insure against losses due to accepting counterfeit currency.
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From page 16... ...
Proceedings of SPIE [International Society for Optical Engineering] , Optical Security and Counterfeit Deterrence Techniques V, R.L.
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From page 17... ...
Proceedings of SPIE, Optical Security and Counterfeit Deterrence Techniques IV, R.L. van Renesse (ed.)
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From page 18... ...
banknotes most used in current machine readers are the optical spectrum and image, magnetic inks, ultraviolet fluorescence, ultraviolet spectrum, and infrared ink pattern. Low-end readers may sense only a single feature, usually the infrared ink pattern; high-end readers may use 10 or more measurements to authenticate each note.
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From page 19... ...
Typically, manufacturers of machine readers report that low-quality counterfeits are identified by a low optical image quality, lack of magnetic and/or infrared ink, or incorrect paper fluorescence. It may require detailed magnetic signature sensing or ultraviolet spectrum sensing to detect high-quality counterfeits.
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From page 20... ...
• Security features that maintain the "look and feel" of historical U.S. banknotes have been added to today's Federal Reserve notes.
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From page 21... ...
The unique look and feel of the substrate itself is an impor tant part of the FRN's recognizability, so printing over much of it may be counterproductive. • The use of machine readers for currency is increasing worldwide; the secu rity features used by machine readers differ from those used by human cash handlers.
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