Counterfeiting

Counterfeiting is the making, passing or possession of fake money intended to be accepted as genuine. The term covers forged banknotes and coins and, more broadly, imitation cheques, bonds and stamps. Because it steals value from whoever ends up holding the fake and undermines confidence in a currency, it is treated as a serious crime almost everywhere, and central banks spend heavily on note design to prevent it.

Counterfeiting should be distinguished from debasement, in which the issuing authority itself reduces the metal content of its coins, as England did in the Great Debasement under Henry VIII. Debasement is official policy; counterfeiting is done by private forgers. It also differs from other kinds of fraud in that the fake object is the money itself, not a false story or a stolen identity.

Imagine a fairground that sells paper tokens for its rides. If someone at home prints their own tokens that look just like the real ones, they get free rides, and the fairground ends up with worthless paper. Worse, once people suspect fakes are about, ride operators start squinting at every token and some refuse them altogether. A small number of fakes makes the whole system slower and less trusted.

Real money faces the same problem. The person cheated is usually not the forger's first victim but the last person to accept the note, because a fake has no value once it is spotted. That is why governments make banknotes hard to copy and why shops check large notes before taking them.

Forgery is as old as coinage. Ancient forgers plated base metal with a thin layer of silver, and others clipped the edges off genuine coins, which is one reason later coins were given milled edges. In England, counterfeiting the King's coin was made high treason by the Treason Act 1351. Isaac Newton, as Warden of the Royal Mint, pursued coiners in the 1690s, and the forger William Chaloner was hanged in 1699.

The spread of paper money made forgery easier. In the American colonies some notes carried the warning "To counterfeit is death", and during the Revolutionary War the British produced fake Continental currency on a large scale. The US Constitution gives Congress the power to punish counterfeiting. By the end of the Civil War an estimated one-third to one-half of the paper money circulating in the United States was counterfeit, and on 5 July 1865 the Treasury created the Secret Service to suppress it. The agency took on presidential protection only after 1901, and still investigates counterfeit US dollars today.

States have also counterfeited each other's money as a weapon. In the Second World War Nazi Germany ran Operation Bernhard, which used concentration camp prisoners to forge large quantities of British pound notes.

Modern notes combine several features that are cheap to check and hard to copy:

• Feel. Raised intaglio printing and special paper or polymer give genuine notes a distinctive texture.
• Look. Watermarks, security threads and see-through windows appear when the note is held to the light.
• Tilt. Holograms, colour-shifting ink and features such as the blue 3-D security ribbon on the US $100 note, introduced in 2013, change as the note moves.
• Machine-readable features. Magnetic, infrared and ultraviolet marks allow banks, ATMs and cash-sorting machines to authenticate notes automatically.

The European Central Bank teaches a "feel, look and tilt" check for the euro. The Bank of England moved to polymer notes between 2016 and 2021, starting with the £5 note and ending with the £50.

Central banks usually report counterfeiting as the number of fakes found for every million genuine notes in circulation:

The ECB reported that about 444,000 counterfeit euro notes were withdrawn in 2025, 20% fewer than in 2024. Applied to the ECB's 2025 data, about 444,000 counterfeits set against the stock of genuine euro notes in circulation, the formula gives the published rate of about 14 counterfeits per million. The €50 and €20 notes together accounted for about 80% of fakes. The Bank of England says that in 2025 fewer than 1 in 24,390 of its notes was counterfeit, about 41 per million, with around 200,000 fakes taken out of circulation.

The International Convention for the Suppression of Counterfeiting Currency, signed in Geneva in 1929, commits signatory states to criminalise counterfeiting of any country's currency and to cooperate across borders. In the United States the main federal offences are in Title 18 of the US Code. In the United Kingdom they fall under the Forgery and Counterfeiting Act 1981, with a maximum sentence of 10 years. Europol acts as the EU's central office for combating euro counterfeiting.

Anyone who receives a fake usually bears the loss: central banks do not reimburse counterfeit notes, which are not legal tender. Counterfeiting is often linked to organised crime and money laundering, and the steady fall in physical cash use has reduced, but not removed, the incentive to forge it.

• European Central Bank: Number of counterfeit euro banknotes remains low in 2025
• Bank of England: Counterfeit banknotes
• United States Secret Service