Name: The Hidden Anti-Counterfeiting Technology Protecting the U.S. Dollar
Uploaded: 2025-04-11T09:00:00Z
Duration: 8 min 32 s
Description: From hidden magnetic fields to the way ink bleeds across the paper, WSJ sits down with a leading currency expert to explore the techniques used to prevent counterfeiting and forgery.

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From hidden magnetic fields to the way ink bleeds across the paper, WSJ sits down with a leading currency expert to explore the techniques used to prevent counterfeiting and forgery. Illustration: George Downs/The Wall Street Journal

https://m.wsj.net/video/20250411/b799f0e6-811e-4c07-bed8-e6b16cc26c97/2/hls/manifest-hd-wifi.m3u8

From hidden magnetic fields to the way ink bleeds across the paper, WSJ sits down with a leading currency expert to explore the techniques used to prevent counterfeiting and forgery.

The Hidden Anti-Counterfeiting Technology Protecting the U.S. Dollar

Narrator: There's a secret pattern hidden on banknotes from around 30 countries around the world. Its purpose? To prevent photocopiers from being able to reproduce money. It's just one of the many hidden tricks used by bank note designers to try and prevent counterfeiting.

It's a plastic, kind of bending sound.

Narrator: Because if somebody can figure out how to fake a note, there's little to stop them from printing millions, and that can destabilize a country's economy.

It can undermine a government in general saying, "We can't even trust the currency that you are issuing, why should we trust your economic system?"

Narrator: And with over 55 billion US bank notes in circulation around the globe, protecting the world's number one traded currency is no easy task, which makes it all the more surprising that this note is one of America's least secure.

And it has never been redesigned. There are no features the public could use to authenticate it.

Narrator: So just what does it take to stop counterfeiters? There are three different tiers of protection that central banks use, each aimed at stopping counterfeiting at different levels. From unsophisticated casual counterfeiters right up to state sponsored terrorists. Shaun Ferrari spent 16 years at the Federal Reserve working to help decide which features should end up in the US dollar.

We Looked at the processing of currency, the counterfeit features that we would put inside the currencies.

Narrator: The first level is designed to quickly stop low level, relatively unsophisticated counterfeiters, and one of the simplest features has been in your hands the whole time.

The feeling that you get as you're just handling it is actually the first security feature of any currency. If you were to take a US bank note for instance and feel it and and listen to it, it has a particular sound. Most of the time, honestly, you don't even look at it.

Narrator: America's bank notes are made of a secret blend of cotton, linen and paper, and for counterfeiters, recreating that feel is half of the battle. While some counterfeiters go to great lengths to fake the feel of the paper, others just use lower denomination notes.

Counterfeiters were bleaching all of the ink off of the $5 note and then printing a higher denomination like the 100 on top of the currency paper.

Narrator: So to prevent this, many countries have switched to polymer bank notes where the note is made of a more plasticky texture.

It's a plastic kind of bending sound rather than a crisp paper sound.

Narrator: But although polymer notes may feel different, they still have a very similar aesthetic, and that's because there's security built into how bank notes are printed using printing presses. See, most modern day inkjet printers are precise, but with bank notes, accuracy and exactness can actually work against you. There are unique things that happen to a piece of paper as ink is applied, things like ink feathering where the ink bleeds in minuscule different directions when printed, creating a slightly fuzzy finish.

Shaun: When you're a counterfeiter, if you're just making a copy of a single note, you're going to have that same feathering effect occur in all of your counterfeits, and that becomes a signature of that counterfeiter.

In 2024, police in Naples arrested a counterfeiter who they said had produced around 11 million euros in fake bank notes by managing to trace the notes back to the same producer. To further secure notes, central banks deploy features like transparent windows, color shifting ink and holograms, which have been on notes since the 1980s.

As you move it, it rolls in color, it kind of turns on and off.

Narrator: But these aren't completely counterfeit-proof.

You can buy holograms, not the same holograms that are on the currency and the movements might not be as crisp but most of the public doesn't necessarily look and discriminate a note all that carefully.

Narrator: Printing with UV ink or embedding UV fibers may also seem secure, but it can still easily be forged with the right skills.

You could use any fluorescent UV product that you could buy on the market and glue on the note. Would it look very good? No. But good enough to fool somebody? Probably.

Narrator: So in more recent years, bank note producers like Crane who make the paper for all of America's money have deployed a new technique, microlens printing,

You're literally putting tens of thousands of micro lenses in a strip that are designed to have an image be three-dimensional. And the reason we don't see microlenses on bank notes around the world yet is because they're fairly new, they're also expensive.

Narrator: And cost is a key consideration when central banks choose which features to use. While the print cost for bank notes tends to be lower than the value of the note itself, printing money can still be a costly exercise. Swiss bank notes feature the majority of the latest security features, and their central bank says they cost an average of around 45 cents each to print, which adds up when in 2024, the country issued 41.5 million new notes. But there's one major flaw with all these systems. They rely on humans to actually check for them, and sometimes that just doesn't happen. Take these movie bank notes, which are printed legally and intended for use as props in film and television.

You would think anybody trying to use this note would immediately see, oh, that's not real. It's not meant to replicate currency. However, it's used to do that.

Narrator: In 2019, the US Secret Service said that of the over $100 million of counterfeit notes in circulation, some 12% were movie notes or similar.

So you can educate to it, you can include all these features. People don't actually use a lot of them,

Narrator: And the risk escalates if you get a fake note to work in a vending machine.

You found a source to be able to enter these notes and get value for them.

Narrator: That's where level two security comes in, designed to stop advanced counterfeiters spoofing machines.

These are typically things like magnetics. There's two types of ink that are used, magnetic ink and non-magnetic ink.

Narrator: These inks are dispersed through the note and create a pattern that a magnetic sensor can read, and to help keep things secure, central banks don't always tell manufacturers of note scanners what they're actually supposed to be looking for, but even at level two, counterfeiters are able to cheat the system.

The machine's only looking for one specific thing, and if you trick that one specific thing, in this case magnetics, that's all you need. It can literally be blank paper that tricks a sensor.

Narrator: Updating security features at this level comes with additional challenges because while changing a magnetic pattern might not be expensive-

What is significant is the cost of having to change bill validators to be able to identify a new feature. And you might not think that a lot, but then as you think more and more, you kind of realize, oh wow, that is a lot.

Narrator: But the biggest risk of all comes if nobody, not humans, machines or central banks are able to tell that the note is fake. And that's where level three, central bank level security comes in, because without it, counterfeiting could be used to upend governments.

Announcer: They produced 350 million counterfeit pounds.

Narrator: Shortly after World War II, a team in Austria found a box of fake printing plates of UK currency made by Nazi Germany.

Announcer: Hitler had them made during the war to undermine Britain's economy by flooding the country with counterfeit money.

Narrator: More recently in 2006, the US accused North Korea of putting $45 million worth of forged $100 bills into circulation, something North Korea denied. The notes were so advanced they became known as Supernotes. So to be able to identify their own bank notes, central banks include a hidden feature at a molecular level, the specifics of which they don't reveal.

It could be wavelength, it could be movement, it could be various ways that the chemicals of the note react to a light or a laser or something like that. Nobody else knows how to make it. Nobody else knows how to get it to react the way it needs to react. That feature is kind of the ultimate fail-safe.

Narrator: So if counterfeiting is so much of a threat to economic security, why hasn't the $1 bill been redesigned in over 60 years, especially given that there are 14.9 billion $1 notes in circulation? After all, many countries routinely redesigned bank notes every seven to ten years, often choosing to retire old designs and stop them from being legal tender. So why hasn't the US redesigned the dollar bill?

And there's a lot of different reasons for that.

Narrator: The first is that the value is so low compared to other bank notes that the US Bureau of Engraving and Printing says it is rarely counterfeited. Replacing it with a potentially expensive new design just isn't worth the cost. Secondly, the challenge of recalling and replacing nearly 15 billion bank notes, not just in America, but around the globe, would be huge.

There's a whole slew of other countries that use the US currency as a store of value.

Narrator: Additionally, designing, printing and distributing a new bank note is not a quick process. When the Bureau of Engraving and Printing began a redesign of their notes in 2003, it took a decade for the new $100 bill to enter into circulation. All of this is why there's actually federal legislation preventing the redesign of the $1. But there may be another reason too, trust.

We want there to always be faith that US currency is good and redeemable.

Narrator: So it's unlikely this note will change anytime soon.