Counterfeit stolen euro notes ink control security evolution - How counterfeit and stolen euro notes are controlled through their ink and how this security has evolved to control electronic money.

Of the more than 25 billion euro banknotes in circulation in Europe during 2020, only 460,000 were returned from the market for being counterfeit, leaving a proportion of seventeen counterfeit notes for every million genuine banknotes, according to the European Central Bank.

Having achieved these figures means reaching the historically lowest level of counterfeit notes detected annually for every million genuine notes in circulation, but: How do you manage to fight counterfeiting?

Euro banknotes are manufactured "using sophisticated printing technologies" and incorporate security features such as a watermark that is created by giving varying degrees of thickness to the paper, or the use of an ink that allows security checks to be added with infrared light.

Martín Sarobe is CEO of SICPA, a company that protects around 150,000 million banknotes in nearly 100 countries with its security ink, and the executive says: "Counterfeiting is currently practically non-existent".

Counterfeit stolen euro notes ink control security evolution

"Banknotes are, I dare say, the most robust, most protected document in the world," Sarobe says.

One of the ways ink is used to detect stolen banknotes is through the intelligent banknote neutralisation system (IBNS). The system activates an ink that stains banknotes "when a criminal opens a container of cash protected as a cashier," according to the ECB.

The company he runs in Spain has 160 employees, bills about 20 million euros in our country and forecasts growth figures between 5% and 10% in the coming years. Its beginnings, however, come from a very different field.

Counterfeit stolen euro notes ink control security evolution: SICPA is the creation that Maurice Amon launched in 1927 to supply animal fat to the food industry. 16 years later the company had turned to security ink, producing its first production of security inks that would be applied to Spanish 100 peseta notes.

The ambition of the company reached the point that the second generation of the family, embodied in Albert Amon, was responsible for designing a standardized security and printing protocol that in 1969 was adopted by the international police, INTERPOL, and are still in force.

This commitment to innovation and development has been impregnated in the company today, Martin Soribe tells Therefore, despite not working directly on the development of digital payment platforms such as Bizum, they do work on verifying the digital identity of the person who orders these transfers.

Counterfeit stolen euro notes ink control security evolution

"The last thing we're working on is the self-sovereign digital identity," says Sarobe, who calls the concept revolutionary. "The identities that one has for the management of a social network in the end... I'm not in control of that identity. I give that control to the platform where it is, " he says.

"If I want to access, for example, a nightclub where access to children under 18 is prohibited, I can give my credentials in which they say my name and simply the age. I don't have to give away where I live or who my parents are."

Counterfeit stolen euro notes ink control security evolution: SICPA's proposal would replace the two-factor identification that currently occurs when issuing a digital payment order. In this way, he says, it would be possible to decentralize the data of banking users, in addition to providing greater freedom about what data is shared.

To achieve this idea, Sarobe assumes not only that they need to continue working, but that an international consensus is needed for the digital identity of a European person, for example, to work in the United States.

Counterfeit stolen euro notes ink control security evolution

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Bankinter warns: cryptocurrencies are "the only structural risk" that markets could face in the coming months

The report of the Bankinter Analysis Department for the third quarter of 2021, which has just been published, warns of the large risks that the markets will face in the coming months and unravels the role of cryptocurrencies as"the only structural risk".

The bank refers to the risks that could pose inflation or a false exit from the coronavirus crisis, but only cryptocurrencies would have that component capable of giving a wallop to the whole system. "Investment in this class of assets, impossible to value, is growing and reaches respectable levels. And their quotes seem progressively more unstable, " the analysts of the financial institution summarize.

The authors of the report point out that of the estimated $ 3 trillion (about 2.5 trillion euros) of cryptocurrency investments (representing the sum of the GDP of Italy, Portugal and Greece), part of that amount would be leveraged, that is, financed through indebtedness. This " raises the risk of erraticity of quotes and not just bitcoin and Ethereum," but of the set of approximately 2,000 existing cryptocurrencies.

However, the biggest handicaps that cryptocurrencies are having, and that pose the biggest risk factors, are the role of China, which has stopped them for escaping its tight control and its high energy consumption, and the dwindling opacity of these currencies, used in part to carry out illegal activities.

On China, the report refers to the Chinese government's ban on mining cryptocurrencies in Sichuan province, "where the country's largest mining center is located." This translated at first into 10% retracements in a single day in bitcoin and Ethereum quotes.

But, as the report points out, perhaps the most relevant thing for cryptocurrencies to pose a structural risk in the stock market is "a recent event that seriously questions and for the first time the supposedly unquestionable opacity of the movements made with cryptocurrencies."

They allude from Bankinter to the recovery of more than 90% of the ransom collected by hackers (75 bitcoins that at that time were worth 4.3 million dollars, about 3.6 million euros) to unlock the operation of Colonial Pipeline, the main oil pipeline of the American coast in May of this year.

"By June 8, the FBI managed to recover most of the ransom paid, which shows that it is possible to follow the traceability of operations in cryptocurrencies and that changes things a lot because they lose one of their main assets: opacity", summary from the Madrid bank.

Both China's belligerence and this loss of opacity " mark a before and after for cryptocurrencies, raising the risk of price adjustment," Bankinter analysts point out, although they specify that this asset class cannot be "objectively valued" due to its peculiar characteristics.

There could be a scenario of progressive and slow adjustment and "in some indirect way, monitored by central banks". However, this is not certain and "a hypothetical sharp adjustment of cryptocurrency quotes would also lead to a sharp disappearance of some of the wealth created around them."

This lost wealth, " would improbably recover with the same ease with which it was created and that would inevitably affect the tone of the market as a whole, exchanges and bonds included."