Counterfeit money is fake currency, usually imitation banknotes or coins, made to be passed off as genuine. The crime of producing, spending or knowingly holding it, together with its history and how authorities fight it, is explained in full in the Counterfeiting entry.
Counterfeit notes harm whoever is left holding them, because banks do not exchange them for real money; they are confiscated. Central banks answer with security features such as watermarks, security threads, raised printing, colour-shifting ink and holograms, and they update note designs as copying technology improves. In the United States the Secret Service was set up in 1865 specifically to fight counterfeiting, at a time when a large share of the paper money in circulation was believed to be fake.
Counterfeiting is different from currency debasement, in which the issuing authority itself lowers the value of its money, for example by reducing the metal content of coins. Both undermine trust in fiat currency, which depends on people accepting notes as genuine.