Counterfeit money, or fake money, refers to currency that is produced illegally without the authorization of the government. Counterfeiting money is a form of fraud and is taken very seriously by authorities due to its potential to destabilize economies. Though counterfeiting has likely existed as long as money itself, there are certain types of fake bills that stand out as the most commonly counterfeited throughout history and around the world today.
Most Common Types of Counterfeit Bills
When examining the most prevalent counterfeit banknotes globally, a few key currencies stand out:
US Dollars
The US dollar is the most counterfeited currency in the world. According to estimates by the United States Secret Service, approximately 60% of the counterfeit money passed globally is in US dollars. This is likely due to the dollar’s status as the most widely circulated currency worldwide. High demand makes it an attractive target for counterfeiters. The most commonly counterfeited US bill is the $20 note, accounting for 75% of all counterfeit US currency detected domestically and internationally. Other frequently counterfeited US bills include the $100, $50, $10, and $5 notes.
Euros
The euro is the second most counterfeited currency in the world after the US dollar. The European Central Bank reports that over 300,000 counterfeit euro banknotes were removed from circulation in the first half of 2022. The ECB also estimates there are approximately 250 counterfeit euro notes for every one million authentic notes in circulation globally. The €20 and €50 notes are the most targeted euro banknotes by counterfeiters.
British Pounds
The British pound sterling is the third most counterfeited currency. The Bank of England estimates approximately 3 in every 10,000 banknotes in circulation in the UK are likely counterfeit, mostly £20 and £50 notes. These counterfeit notes represent a very small percentage of the over 4 billion authentic notes in circulation. Nevertheless, authorities continue monitoring and improving security features to stay ahead of counterfeiters.
Japanese Yen
The Japanese yen is also among the most commonly counterfeited currencies, though on a smaller scale compared to dollars, euros, and pounds. Most counterfeit yen is produced in China and Korea. Approximately one out of every 20,000 yen banknotes in circulation is counterfeit. The most targeted denominations are the 1,000 and 10,000 yen bills.
Chinese Renminbi
Counterfeiting of Chinese currency, the renminbi, has grown along with China’s economic power on the global stage. Most counterfeit renminbi originates from North Korea, which uses it to finance illicit activities and circumvent trade sanctions. It is estimated hundreds of millions of high-quality fake 100 yuan notes enter circulation annually, comprising approximately .01% to .1% of China’s total currency in circulation.
| Currency | Most Counterfeited Denomination | Total Counterfeits in Circulation |
|---|---|---|
| US Dollar | $20 | 60% globally |
| Euro | €20, €50 | 250 per million in circulation |
| British Pound | £20, £50 | 3 in 10,000 notes in UK |
| Japanese Yen | 1000, 10,000 yen | 1 in 20,000 notes |
| Chinese Renminbi | 100 yuan | .01%-.1% of total in circulation |
Why Currencies are Counterfeited
There are several key reasons why criminal organizations and individuals are motivated to produce fake money:
Profit
Counterfeiting offers potentially very high profits at relatively low risk compared to other illicit activities. Producing fake bills can be inexpensive using widely available printers and computer graphics and design software. Passing counterfeit currency can result in large gains if the imitation bills are of sufficient quality to be accepted. Even unsuccessful passes result in little lost beyond the cost of production. The profits then finance further criminal operations.
Difficult to Detect
While security features on banknotes are constantly improving, counterfeiting technology also advances. Highly sophisticated fakes can be difficult for average people and businesses to identify. Circulation of counterfeits is often widespread before authorities detect patterns. The difficulty of detection makes it an appealing avenue for criminals.
Low Penalties
In many countries, penalties for circulating fake currency are relatively minor compared to other financial crimes or violent offenses. Those caught face jail time, fines, or probation, but enforcement can be inconsistent and laws lax in some jurisdictions. The low risk of harsh punishment reduces deterrence.
Undermines Trust
Widespread counterfeiting undermines public trust in a currency and the institutions issuing it. This leads to broader economic instabilities that criminals can further exploit. For foreign adversaries and terrorist groups, generating large amounts of fake bills can be used as a tactic to destabilize economies and governments.
Launders Other Proceeds
Spending counterfeit bills allows criminal groups a means to launder revenues obtained illegally through other activities, such as drug trafficking, corruption, or weapons sales. Introducing fake notes into legitimate business transactions helps obscure illicit cash flows and fund further criminal enterprises.
Counterfeiting Techniques and Technology
Advancements in affordable technology have made it easier for more counterfeiters to produce higher quality fake currency. Some of the most common techniques and technology utilized include:
Digital Scanning and Printing
Most counterfeiting today uses consumer-grade scanners, computers, and inkjet or laser printers. A bill is digitally scanned, then edited with graphics software to manipulate elements or generate new sequential serial numbers. The new notes are then printed on paper, sometimes with added texture or security features embedded.
Plated Printing Presses
More sophisticated operations employ engraving or etching plates to emboss the images and textures onto a template with a counterfeit-modified printing press. The plates are created from scratch or by altering genuine plates stolen from government mints. The presses allow mass production of fakes.
Watermarks and Holograms
Embedding watermarks and holographic strips into the paper is another technique used by counterfeiters to better replicate the look of genuine bills. Watermarks in particular help the false notes pass cursory inspections where the bills are held up to the light.
Bleaching Authentic Bills
Some counterfeiting rings bleach small denominations of genuine currency using chemicals, effectively removing the ink. The bills are then reprinted as higher denominations. A $1 bill could become a $100 bill, for example. The authentic paper substrate helps the fakes go undetected.
3D Printing
As 3D printing technology improves, counterfeiters are beginning to digitally replicate the tactile feel and texture of currency. 3D scanning and printing can produce convincing fakes, though the equipment is still largely cost prohibitive for mass counterfeiting.
| Method | Description |
|---|---|
| Digital Scanning and Printing | Use of consumer scanners, graphics software, and inkjet/laser printers to produce fake bills |
| Plated Printing Presses | Engraved printing plates stamped onto paper using counterfeit presses |
| Watermarks and Holograms | Security features like watermarks and holograms added to mimic genuine notes |
| Bleaching Authentic Bills | Removing ink from lower denominations and reprinting as higher values |
| 3D Printing | Early use of 3D scanning and printing to fake texture, feel of notes |
Major Sources and Locations of Counterfeits
While counterfeiting occurs nearly everywhere in the world, there are some major sources and locations where large amounts of prominent counterfeit currencies, like US dollars, originate:
North Korea
North Korea is responsible for producing extremely high quality counterfeit $100 USD notes, known as “supernotes.” It is believed to be state-sponsored counterfeiting, with the fake dollars used to fund illicit activities and the regime. Defectors have confirmed the government’s role in counterfeiting.
China
A significant amount of counterfeit US currency originates in southern China. Local criminal syndicates control large-scale counterfeiting operations. Yunnan province in particular has been identified as a major hub for producing high volumes of fake $100 bills for international distribution by criminal networks.
Colombia
Colombia has a long history counterfeiting American dollars and euros. During the 1990s and early 2000s, the Cali drug cartel generated millions in false US notes, later taken over by paramilitary groups and guerilla organizations who continue to fund operations through counterfeiting.
Peru
Lima, Peru was identified by the US Secret Service in 2005 as the source of a large portion of high-quality fake $100 bills passed in the US. Counterfeiting rings grew quickly in Lima’s illegal slums and appear to have links to broader organized crime and money laundering activities in Peru.
Italy
The Camorra organized crime groups of Naples and other parts of Italy have engaged in counterfeiting both euros and US dollars. Local crime rings with international reach have invested substantial resources into producing and circulating fake bills around the world.
| Country | Details |
|---|---|
| North Korea | State-sponsored “supernotes” of very high quality |
| China | Major source of fake $100 bills from criminal groups |
| Colombia | Long history of counterfeiting by cartels and armed groups |
| Peru | Major source of $100 bills linked to criminal networks |
| Italy | Camorra crime rings produce and circulate fake euros and dollars |
Anti-Counterfeiting Measures
Governments and monetary authorities are constantly developing more advanced security features and enforcement methods to stay ahead of counterfeiters and protect the integrity of their currencies. Some key anti-counterfeiting measures include:
Overt Security Features
Modern banknotes have sophisticated overt security features designed to be easily recognizable and verifiable by the public, such as watermarks, security threads, color-shifting ink, holograms, and microprinting. These make it easier to spot fakes.
Covert Security Features
Less obvious covert features are embedded in many banknotes, detectable only by authorities through spectrographic devices, magnetic scanners, infrared lenses, and other analysis tools. These allow officials to verify authenticity.
Note Tracking and Forensic Analysis
Authorities track counterfeits and analyze the ink, paper, and other properties through databases and lab techniques. This provides data to identify patterns and sources to aid enforcement.
Public Education
Central banks and law enforcement educate businesses and the public on how to identify fake bills by spotlighting key security features on websites, flyers, and community engagement initiatives.
Anti-Counterfeiting Task Forces
Domestic and international anti-counterfeiting task forces coordinate cross-agency efforts to disrupt counterfeiting operations through surveillance, undercover work, and financial forensics.
Harsh Criminal Penalties
Laws levy harsh fines and prison sentences for counterfeiting crimes to increase deterrence, though enforcement varies across jurisdictions. Some countries like North Korea even issue the death penalty.
| Measure | Description |
|---|---|
| Overt Security Features | Easily recognizable features like watermarks and holograms |
| Covert Security Features | Hidden features identifiable via instruments |
| Note Tracking and Forensics | Analyzing ink, paper, etc. to establish patterns |
| Public Education | Teaching the public how to spot fakes |
| Anti-Counterfeiting Task Forces | Cross-agency teams targeting operations |
| Harsh Criminal Penalties | Prison, fines, death penalty in some countries |
Impact of Counterfeiting on Society
While counterfeiting money may seem like a relatively minor crime, it can have serious detrimental impacts when it reaches larger scales:
Economic Harm
When counterfeit notes reach a significant share of money in circulation, it effectively expands the money supply by creating new unbacked currency. This causes inflation, devalues the legitimate currency, and weakens the economy.
Lost Tax Revenues
Governments lose tax revenues from counterfeit sales, as fake bills allow criminals to hide capital in cash transactions. This limits funds for public services and social programs.
Consumers Bear the Costs
Businesses increase prices to account for counterfeit losses, passing the costs on to consumers. It especially hurts poorer households and erodes trust in commerce.
Undermine Legitimate Business
Widespread counterfeiting bankrupts some small businesses lacking the resources to absorb the losses from fakes. It enables unfair competition from criminals.
Funds Criminal Enterprises
Profits from counterfeits finance activities like drug trafficking, terrorism, human trafficking, illegal weapons sales, and other serious crimes that threaten public safety and security.
Public and Social Unrest
As people lose jobs, prices rise, and criminality spreads from counterfeiting problems, it stirs social unrest, anxiety, and dissatisfaction that can destabilize governments.
| Impact | Details |
|---|---|
| Economic Harm | Inflation, devalued currency, weakened economy |
| Lost Tax Revenues | Reduced funds for public services |
| Consumers Bear Costs | Increased prices passed to consumers |
| Undermine Legitimate Business | Bankruptcies from losses, unfair competition |
| Fund Criminal Enterprises | Drugs, terrorism, trafficking, illegal weapons |
| Public and Social Unrest | Anxiety, dissatisfaction, and instability |
Conclusion
Counterfeiting of major currencies like US dollars, euros, and British pounds is a persistent and adaptive problem globally. Driven by profit potential and the relative ease of producing high quality fakes, criminal organizations, rogue states, and small counterfeiting rings all partake in creating and circulating false notes to fund further illicit activities. While no currency is immune to counterfeiting, monetary authorities utilize increasingly sophisticated security features and enforcement methods to guard integrity and trust in their currencies. But as technology progresses, so do the efforts of counterfeiters, in a constant arms race of security pitted against deception.
