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How Much of U.S. (and World) Money in Circulation is Counterfeit?

Posted in General FAQ'S on November 16, 2016

Counterfeiting money is one of the oldest crimes in human history, dating back to when early civilizations first started circulating physical currency. Before the advent of paper currency, most money took the form of coins minted using precious metals such as silver and gold. Ancient counterfeiters would replicate these coins using cheap metals such as copper, tin, or other base metals, and plate the coins with gold or silver.

Today, modern technology affords us the ability to print highly specialized currency with several qualities meant to make false reproduction very difficult. U.S. currency today is printed on special paper made from linen and cotton fibers and features color-changing inks, watermarks, and specialized threads in different positions for every denomination. The newest version of the $100 bill features a bright blue holographic strip featuring tiny depictions of the Liberty Bell, which turn into 100s as you tilt the note. These measures exist to make counterfeiting U.S. currency as difficult as possible. Despite these factors, counterfeiting still occurs.

How Much U.S. Money is Fake?

A 2006 study released by the U.S. Department of Treasury declared roughly one out of every 10,000 currency notes in circulation is counterfeit. Many people do not realize that as the number of counterfeit notes in circulation increases, the real currency notes are devalued. The only organization permitted to print official U.S. currency is the Federal Reserve. Currency printed in any other location or by any other organization is categorically counterfeit, even if those producing it somehow manage to perfectly replicate legitimate currency.

Superdollars are another area of concern. A superdollar is a high quality counterfeit note practically indistinguishable from a real note. U.S. Treasury officials estimate there are close to $45 million worth of superdollar notes in world circulation, and $15 to $25 million of those superdollars are believed to originate in North Korea. The North Korean government has vehemently denied the accusations that superdollars are being printed within their borders.

U.S. Counterfeiting Laws

The first U.S. federal anti-counterfeiting law was passed in 1790, and since then, new legislative measures have been passed as counterfeiting techniques have evolved. Counterfeit currency creates economic instability and diminishes citizens’ faith in both the money and the government, so the punishments for counterfeiting are severe. Anyone found guilty of counterfeiting faces steep fines of up to $250,000 and may spend as much as 20 years in prison. These punishments apply to anyone caught counterfeiting U.S. currency or foreign currency within U.S. borders. Counterfeiters may also face additional penalties if their activities caused losses to other parties.

Counterfeiting Outside the U.S.

Counterfeiting affects just about every form of currency in the world today. After the launch of the Euro in 2002, European officials seized millions of counterfeit Euros. In 2014, Italian law enforcement seized over half a million counterfeit Euro coins. China altered their banknotes in the 1990s to combat counterfeiting, which carries the death penalty for extreme cases under Chinese law. In many Asian countries including China, Japan, Taiwan, and South Korea, large-scale counterfeiting operations carry a lifetime prison sentence.

Defenses in a Counterfeiting Case

There are very few viable defenses if you are accused of counterfeiting currency, or found in possession of counterfeit notes. In rare cases, if the counterfeit currency is such poor quality that any ordinary person could spot the difference, a court may deem the notes do not qualify as counterfeit. The counterfeiter’s intent plays a large role in these cases. If the notes were meant to cause financial harm to anyone, or did cause any losses, such a defense will likely not hold up in court.