Funny Money

What if money could talk...literally? The notion is not as far-fetched as one would think.

Technology aimed at reducing the flow of counterfeit money into the economy could eventually lead to the creation of multi-functional "smart" money.

That the United States is in the midst of a currency counterfeiting epidemic is hardly debatable. According to statistics released by the Secret Service's Counterfeit Division, roughly $48 million in phony money was put into circulation last year, compared to just under $30 million in 1996. The reason for this drastic increase: improvements in scanner and inkjet printer technology. Indeed, back in 1996, only 2.5% of counterfeit bills were produced using computers and desktop printers. Last year, a whopping 39% of fake money was made using this method.

This problem is not unique to America. So many fake C$100 bills have appeared in Canada that merchants have stopped accepting the denomination. Australia, Brazil and Mexico have also suffered at the hands of modern counterfeiters.

To combat this increase in false currency, the U.S. government has tried redesigning bills and adding security measures such as ID threads, all of which have done little to slow counterfeiters. It remains to be seen how the latest anti-counterfeiting measure-the additions of certain dyes to popular denominations-will pan out.

Other nations have taken a more futuristic and successful approach to fighting counterfeiters. They have switched over to paper-like plastic bills that contain a small, transparent window, rendering them impossible to copy on a scanner or inkjet printer. This type of currency is also reportedly more durable and recyclable than paper bills.

Australia has led the charge in developing plastic money, and has exported the technology to a number of nations, including Mexico and Brazil. Canada is supposedly taking a hard look at the new bills to solve their counterfeiting woes. The 12 European nations that currently circulate the euro may soon switch over to plastic currency as well.

Supposedly, the U.S. Treasury is also examining the potential of plastic dough. However, it might be a while before the U.S. converts to the technology, since it would require replacements or adjustments to millions of ATMs and currency counting and vending machines.

Still, I have to believe the future lies in plastic money, which lends itself to many more applications than paper. It's not hard to envision that some sort of computer chip could eventually be placed in plastic bills, in much to same way chips are being integrated with credit cards today.

Perhaps over time, these chips can be programmed for individual wants and needs. Imagine a bill that, when scanned at a retailer, politely reminds you that it is dedicated to paying the mortgage, not to buying a new DVD player.

Now that would bring a whole new meaning to fiscal responsibility.