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Man holding a banknote against the light to see the security features
#Cash

Banknotes that promise maximum security

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6 Mins.

Central banks have always been in constant competition against counterfeiting. That’s why today’s banknotes have a multilayered security architecture, combining visible – and thus well-known – security elements, such as watermarks, with invisible features. Not every substrate offers this security architecture, but cotton-based banknotes have proven themselves extremely effective

Counterfeit banknotes have long been produced on the broad spectrum of forgery. Depending on their planned use and situation, banknotes are forged at greater or lesser expense – from individual notes to huge volumes of cash.

Hand-finished single forgeries rarely make it into circulation, due to the high effort of their production and the relatively low return. However, large-scale counterfeiting does pose a problem for central banks: nothing can damage trust in cash as severely as the emerging suspicion that counterfeit money may be in circulation. The reason for this is that anyone who unknowingly accepts or pays with counterfeit money can be prosecuted – even if they are not the originator of the notes or if they did not do so with intent – and is liable for the costs.

Counterfeit money removed from circulation is usually examined by the state’s criminal authorities in cooperation with the central bank. The focus here is on identifying the fake notes to try to link them to their possible originators. This is how counterfeit money factories can be tracked down and professional counterfeiting rings broken. On an international level, this is usually achieved through close cooperation between national criminal authorities and international police organizations such as Europol or Interpol.

Counterfeiting: big fish and little fish

Banknote Honduras App
Apps help to explain the security features of new banknotes

The biggest challenge comes in the form of organized networks that base their business models on bringing counterfeit money worth millions of euros into circulation. That’s why central banks must make it as difficult as possible for the counterfeiting rings, because the greater the effort to make deceptively genuine-looking copies, the harder it is for the fraudsters. For several years now, slightly altered copies of banknotes have also been showing up in the counterfeit statistics, known as “movie money.” These notes, which are often the right format and printed using commercial offset printing, generally enter circulation in low denominations. They make no effort to reproduce any security features. That fact clearly shows that we cannot afford to neglect public education on the authenticity of banknotes. When launching a new series of notes, many central banks are relying on a mobile application that explains the visual security elements and how to check them in a simple and clear way. A current example of this is the Central Bank of Honduras, which launched the new 200-lempira commemorative note in September 2021 and introduced the population to the new security features and their visually variable effects.

The security architecture of banknotes

Banknote design makes use of a three-stage security architecture: on the first level (level 1), there are features that people can see, feel, and detect immediately, and easily check for. A key component is the distinctive feel of intaglio printing, combined with the cotton-based substrates.

The second level, level 2, includes all those features that can be identified with the aid of testing equipment, such as a UV lamp at the supermarket checkout, or using a machine such as the sensors contained in payment machines, deposit machines, or banknote handling and processing systems.

Level 3 is the highest level of security, and only central banks are able to check features at this level.

Visual authentication features are still the best-known security features among the general public: the watermark and the security thread. Both have undergone technological development over the last few decades.

The security thread is a good example of how different techniques can work on several levels simultaneously: it allows the public to intuitively check the security feature in direct or indirect light and can also contain machine-readable elements such as magnetic coding (MultiCode™) or fluorescence. However, the development of visual security features must bear in mind the trends in the commercial market: for example, there are widely available nail polishes that have optically variable and magnetic properties and can be used to achieve cheap imitations of foil elements. G+D’s latest development, the RollingStar® i+ security thread, clearly stands out from commercially available materials due to its enhanced design resolution, greater brilliance, and clearer color changes. In addition to the individual design possibilities and the use of high-security technologies, the bar is set extremely high for the counterfeiters, because every security thread is embedded directly in the banknote paper.

Where design meets technology

“Only the combination of more complex, more advanced technologies, coupled with a striking design, allows us to offer maximum security for every banknote denomination,” says Astrid Drexler, Product Manager Banknotes.

Alongside the requirements of security and durability, sustainability also plays a role in the production of banknotes. Currently, these requirements are matched thanks to cotton-based substrates composed of waste cotton product from the textile industry. More than 95% of all banknotes around the world are printed on substrates based on cotton, and for good reason.1 With Hybrid ADDvance®, G+D has created an innovative cotton substrate that scarcely differs from a traditional cotton substrate in look and feel. What makes Hybrid ADDvance® so special is the two extremely thin polymer foils on both sides that not only provide protection against signs of wear, but also the embedded security elements.

“If the security features are inseparably bound to the paper, they create maximum security from within – no matter what the value of the banknote may be“
Astrid Drexler
Product Manager Banknotes

Obviously, watermarks and security threads are well-known – and windows, foils, and special colors and printing techniques are also intended to make visual and haptic authentication easier for the public. Nevertheless, banknote design is rarely noticed in everyday life, although we are all subconsciously aware of it. It is usually difficult for users to give a detailed description of the authenticity features of security elements. And it is precisely this gap in the public’s knowledge that the fraudsters exploit: they imitate the essence. At the end of the day, most counterfeits are easy to identify on careful examination. G+D has conducted extensive analyses of how the human eye interacts with a banknote: it finds a visual anchor and pays more attention to some things than others. G+D has used these findings in its design development and has created an optimal combination of different anti-counterfeiting elements to achieve maximum awareness.

Design as a key element of security architecture

Banknote with a security element as part of its design
The security element is a part of the banknote design

To achieve this, the designer uses storytelling, whereby the banknote and its individual elements tell a story: motifs that are repeated in the different security elements, combined to create a single striking motif, or that complement each other on the front and back. It makes it possible to quickly spot when “something’s not quite right,” without being able to explain in detail. A story links the visual elements together, helping to achieve an intuitive evaluation – rapid detection is key. This process also makes life harder for the fraudsters because they usually concentrate on the most noticeable security features and don’t worry so much about the design and combination of individual elements. Professionals from criminal authorities and central banks have confirmed this.

So, it’s not the number of security features, but the way they’re combined that makes a banknote secure. This also includes a well-thought-out design that not only fulfills the aesthetic requirements, but also forms an elementary part of the security architecture. This intuitive sense of authenticity, gleaned through look and feel, is what creates the necessary trust.

The task of all central banks is to ensure security and trust in a currency. The combination of cotton-based substrate and visually attractive and machine-readable security features to create a well-thought-out design is what makes a banknote as secure as technologically possible.

  1. Video vom Bankenverband: So erkennen Sie Falschgeld [How to recognize counterfeit money] (German only), handwerk magazin, 2015

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