The sophistication of the ring was mind-blowing. In addition to being able to reproduce the shiny holographic stripe on the $20 bill by using metallic foil purchased from a novelty supplier in California, the group figured out how to mimic the special watermark embedded in the paper, by using several layers of white ink to reproduce the face of the Queen.
What is more troubling, though, is that all of that fake money seized at the two print shops doesn’t even show up in Canada’s counterfeiting statistics – because it never made its way into circulation.
In 2008, the counterfeiting rate had fallen to 76 PPM, or 76 bills for every one million real ones. Though the number appeared to be retreating nicely from Canada’s record-high PPM in 2004, it was misleading. Had these seized bills made it out onto the streets, Canada’s numbers would have shot up to levels never seen before. A new counterfeiting crisis had been averted – but only narrowly.
The Bank of Canada decided to make the switch to polymer.
Canada will buy the polymer substrate from Australia, which until recently held the sole patent on the material and kept the recipe a closely guarded secret. Few companies have been able to set up and make the polymer substrate that Mr. Solomon invented. Chemical giant DuPont attempted a rival product in the 1980s, but gave up when it couldn’t make the material tough enough.
The substrate will be imported in secure shipments that are treated with the same precaution as transporting actual currency. The polymer money will then be printed in Canada by the two printers who inked the country’s paper money in the past, BA International Inc. and Canadian Banknote Co. Ltd.
By protecting the polymer substrate, the strategy is akin to placing hundreds of guards around the Mulberry forest centuries ago.
THE GREAT MONEY SCRUB
As Canada’s polymer money is introduced over the next two years, paper banknotes will be rounded up and removed from circulation in the largest scrubbing of Canada’s system of paper currency. Old paper notes that find their way to banks will be sent off to the Bank of Canada to be burned. Polymer bills will then be released.
The Bank of Canada issues between 300 million and 400 million new notes a year, replacing torn, taped, defaced and crumpled bills with crisp replacements as needed. At that rate, it would take four to five years to replenish the entire supply of notes. But the central bank will be attempting to replace paper money in the span of about three years, swapping out the cash much faster than usual.
Counterfeiting rates have fallen steadily in Canada in recent years, particularly after the ring in Ontario was dismantled by RCMP.
The country now reports a parts-per-million ratio of below 40, which is finally in line with what most G20 nations consider acceptable. But a recent internal survey by the Bank of Canada indicates trust has been slow to return: Five per cent of retailers still do not accept the $100 bill, an improvement from nearly a decade ago, but still not complete acceptance.
Though money is called legal tender, businesses aren’t bound by law to accept it. The term just means that the note is backed by a stated value. Store owners can turn down cash if they wish – and many do.
At a Wendy’s restaurant in Etobicoke, Ont., a sign on the window warns customers that large denominations are not welcome: “Due to increased concerns over counterfeit $100 bills, Wendy’s can not accept $100 bills from any customer.”
The new polymer $100 bill has been in circulation for less than 24 hours when one of them is handed to the cashier to pay for a $7 meal. After close inspection, the cashier nods and accepts the strange new bill.
It is a small but significant change in thinking for a business that lost confidence in some of the country’s banknotes during a decade of rising counterfeit numbers. But there is still a long way to go. This is just one location, and polymer money has barely started circulating. The great money scrub has only just begun.