Counterfeit Currency Outdated Against New 3-D Banknotes and Cashless Transactions

Japan is releasing three new banknotes in July. One is the new 10,000 yen note featuring Eiichi Shibusawa, revered as the "father of modern Japanese economy." However, the primary aim of this release is to combat counterfeit currency.

According to the National Police Agency, 681 counterfeit bills were discovered in 2023. That is a staggering 1/30th of peak counterfeit levels in the post-2000 era.

Several factors have contributed to this decline, including a surge in cashless transactions and reduced use of cash. Nevertheless, historically famous unsolved counterfeit crimes also dot the narrative of counterfeit bills. Referred to as "ganpei" in police slang, legends of counterfeit money abound around the world. So what is it that has newly caused such a stir?

Advances in Counterfeit Prevention Technology

National Police Agency data reveals a rise in counterfeit bill discoveries in 2000. That year, 4,257 counterfeit bills were discovered. However, the numbers hadn't peaked yet.

In 2000, the police uncovered 20,211 counterfeit bills, and in 2004 they found 25,858 false bank notes. Thereafter, a sharp drop followed, bringing the number down to 15,779 in 2007. Since the onset of the Reiwa era in 2019, cases have steadily declined to 2,887.

A Ministry of Finance official noted, "This is the first time we've issued new banknotes in 20 years, since 2004. It's part of a strategic effort to introduce new notes on an irregular basis. Meanwhile, the interval allowed time for research to combat counterfeiting." Expressing confidence, they added, "This time we're introducing the world's first anti-counterfeiting 3D hologram."

This technology alters the portrait's appearance when the bill is tilted. It also introduces intricate watermarks and UV-reactive ink that glows under ultraviolet light for enhanced security.

*A sample of the front of new banknotes at the National Printing Bureau in Kita-ku, Tokyo. June 28, 2023 (©Sankei by Masahiro Sakai)*

Legends of Counterfeit Money

According to senior police officials, during Japan's rapid economic growth in the mid-20th century, there were a series of well-known counterfeit currency cases. These involved the printing and circulation of highly technical and sophisticated counterfeit bills. One was the Chi-37 case, which started in 1961. Known as Japan's "largest post-war counterfeit currency case," it expired in 1976 when the crime reached the statute of limitations.

The Chi-37 incident involved circulating a large volume of counterfeit 1,000 yen notes. This prompted a portrait change on the bill from Prince Shotoku to Hirobumi Ito. For the incident's name, "Chi" was chosen due to its resemblance to the Japanese character for "thousand." Its number, 37, shows that it was the 37th counterfeit bill to be discovered.

One police official related, "In the past, some criminals were driven by a craftsman's mentality. They were [making counterfeit bills] not merely for profit, but to showcase their printing skills."

*Sample of the new 10,000 yen note that starts circulating in July as unveiled by the Bank of Japan. (©Sankei by Kazuya Kamogawa)*

The Rise of Electronic Payments

From the 1990s to the early 2000s, color copiers rapidly proliferated in convenience stores and households across Japan. "While it might be misleading to say they made it 'convenient,' printer technology corresponded to a notable surge in easy counterfeit production," remarked a police official. This trend is believed to have contributed to the sharp rise in counterfeit bills from 2002 to 2004.

After the surge, however, there was a marked decrease in counterfeit bills. That decline was closely tied to the widespread adoption of cashless payments throughout society.

JR East introduced Suica in 2001, followed by JR West's ICOCA. PASMO soon followed. All three are prepaid electronic money systems that have continued to evolve. Recently, payment systems like "XX Pay," which uses QR codes, have gained rapid popularity.

*A Suica card for cashless payment of metro and train fees (courtesy of JR East)*

Additionally, the use of credit cards has become commonplace. According to a recent survey by the Nippon Institute for Research Advancement (NIRA), credit card usage has increased from 31.0% of all payments 5 years ago to 41.0% today. Meanwhile, QR code payments, which previously accounted for just 0.7%, have surged to 9.2%.

State-Sponsored Counterfeiting

Counterfeiting has long been a recurring theme in literature. Often it is portrayed as a crime that destabilizes the national order. Even the acclaimed anime film Lupin III: The Castle of Cagliostro, directed by Hayao Miyazaki, centers around a counterfeit currency case.

A police official observed that "Crimes targeting familiar bills such as the 1,000 yen note are becoming less profitable." He noted "the rise of cashless transactions" compared to the "time and cost involved" in creating counterfeit bills. However, he speculated, "State-sponsored counterfeiting, like the nearly perfect counterfeit 100 US dollar "supernotes" linked to North Korea, is likely to persist."

In a cashless society, criminals have expanded their targets. Now they include cryptocurrencies like Bitcoin, online banking accounts, and credit cards. Law enforcement remains vigilant against counterfeit currency. However, as underscored by another police official, "Effective measures against cybercrime are urgently required."