Will the UK’s switch to polymer banknotes bring an end to counterfeit currency?

polymer-banknote

The UK’s new polymer bank notes are cost-effective to produce, incredibly durable, and contain advanced security features that could never have been implemented using traditional cotton-based currency. But… the question being asked by law enforcement and document examination professionals is; will the switch to polymer prevent criminal gangs and counterfeiters from producing fake currency worth millions?

 

In 2016 counterfeit banknotes with a face value of £7.5mn were removed from circulation in the UK. However, while you might expect this figure to drop in coming years, thanks to the switchover to polymer, it appears unlikely that the change will have any immediate impact on the “value” or quantity of forged notes in circulation.

 

According to figures collated by the Bank of England, approximately 347,000 individual counterfeit notes were taken out of circulation in 2016, with the vast majority of those being discovered by the banking system during the process of counting and sorting notes for re-circulation. Notably, of the huge quantity of notes seized, £5 and £10 notes (the first two denominations to switch to polymer) only accounted for 6.9%. The vast majority of fakes identified and seized were counterfeit £20 notes (297,000 notes with a face value of £5.9mn), a note that is not scheduled to be ‘upgraded’ to polymer until 2020.

The end of counterfeits?

So what then? Will 2020 signal the end of counterfeit currency in the UK?

While it is unlikely that counterfeiting will ever be eradicated, data from elsewhere suggests that the switch to polymer will have an impact on the producers of counterfeit currency; in the short term at least…

When The Bank of Canada launched polymer banknotes in 2012, a reduction in fake notes was recorded immediately - 28 notes per million in circulation, down from 34 notes per million the previous year.

In Australia, where plastic notes were introduced more than 20 years ago, the switch to polymer was equally successful. However, more recently the number of counterfeits in circulation has begun to rise. In 2016 there were reports that Australia was being flooded with fake $50AUD bank notes ‘so good they fool the banks’.

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The UK's new Jane Austin £10 polymer banknote includes a number of innovative security features

Need for innovation

Given enough time, criminal gangs will always find the resources necessary to produce fake currency.

The once state-of-the-art security features used in the design of Australian polymer banknotes are now under threat. During the 20 years that the Reserve Bank of Australia has been producing polymer currency, there have been significant advances in digital imaging and printing technology that have allowed the counterfeiters to catch up.

In Australia, the quality of counterfeit $50AUD notes is such that they pass all of the bank's checks. In this situation, the only option is to withdraw the ageing notes, to introduce new security features, and to once again upgrade the security of bank notes.

Cycle of innovation

What keeps counterfeiters at bay is not the substrate that currency is printed on but the cycle of innovation that keeps security printers one step ahead of the criminals that produce forgeries. In order to achieve this, there must be a constant development of new security features and an advancement of the technology used to detect and examine counterfeits.

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Australian polymer currency is under threat from counterfeits of an increasingly high quality

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