Building a Better Bill: To Curb Counterfeiting, Paper Goes High-Tech

With several high-profile counterfeiting cases in the U.S. this year -- and with crooks having access to increasingly sophisticated printing and copying technology -- governments are pushing hard to make paper currency more secure through technology.

A first peek at what the currency of the future looks like comes from Morocco, which this week is rolling out notes made from a high-tech composite called Durasafe. Made by Vancouver-based Fortress Paper Ltd. (FTP: TSX) -- which also produces paper for the Swiss franc and the euro -- the technology behind Durasafe is designed to foil even the canniest counterfeiters.

Morocco's new 25-dihram note is a sandwich of two thin sheets of cotton banknote paper surrounding a layer of polymer (the blue in the diagram below). Each piece of the three-layer composite is die-cut separately at asymmetrical intervals. The holes create tiny "windows" that offer a glimpse of interior security features, such as a magenta/green color-shift thread and a watermark of King Mohammed VI. The technology will also launch next year in two undisclosed countries, one in Africa and the other in Eastern Europe.

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The United States, too, is about to turn its currency's security up a notch. Fortress's president, Chad Wasilenkoff, estimates that there are 1 million counterfeit U.S. bills in circulation, and the quality of fakes gets better all the time. In 2008, Crane & Co., which prints U.S. banknotes, started using a nano thread in $100 bills that only becomes visible when held to the light. The $5 bill also uses color-shifting ink and an embedded watermark to heighten security.

Crane has some other cool tricks in the works. Doug Crane, vice president of business development and government relations, says the company is working on microscopic lenses and "motion technology," in which an image on the paper appears to move depending on how a bill is tilted.

In fact, a new $100 bill to be issued in 2013 will feature a 6-by-2mm ribbon woven into the bill on which an abundance of little lenses will be incorporated. The pixels will reflect light differently as a bill is viewed from different angles, and images of the Liberty Bell will appear to move across the bill and morph into the number 100.

"You can't create advanced optical materials using an inkjet printer," Crane said. "For a counterfeiter to come up with a way to produce a material like that, it's darn near impossible or very difficult."

Making counterfeiting just that type of a prohibitive and expensive hassle is the goal of amped-up security features. "Nothing is counterfeit-proof," Wasilenkoff observed. "It can all be replicated with enough time, energy and effort." If it's too hard to fake the new bills, then crooks "will counterfeit an easier banknote," he said. And at the rate paper technology is advancing, those easier options will be harder and harder to find.