Some 460,000 counterfeit euro banknotes were withdrawn from circulation in 2020 (220,000 in the second half of the year), a decrease of 17.7% when compared with 2019.
€20 and €50 notes continued to be the most counterfeited banknotes, jointly accounting for about two thirds of the total. 94.5% of counterfeits were found in euro area countries, while 2.8% were found in non-euro area EU member states and 2.7% in other parts of the world.
The ECB completed the introduction of the new Europa series in May 2019 with the issue of the new €100 and €200 banknotes, so 2020 was the first full year of reporting since the whole series has been in place. Whilst the ECB does not differentiate between counterfeits of the first and second series, it can be safely assumed that the upgrade in security is paying dividends, with the ECB stating that ‘the second series of banknotes is even more secure and is helping to maintain public trust in the currency’.
Could another factor, however, be the reduction in not just economic activity, but all activity over the course of the last year? People have been spending less and using cash less, so does it follow that counterfeiting activity is also less?
That said, there isn’t less cash in circulation. The volume of banknotes in circulation at the end of 2020 was 26.4 billion, compared with 24 billion at the end of 2019 – another example of the so-called cash paradox of higher demand but lower transactional usage.
But cybercrime on the rise
In stark contrast to falling counterfeit rates for banknotes, cyber-crime is on the rise.
The move to more online activity started well before the pandemic began, although the pandemic has accelerated the move to online spending. In response to changing payment behaviour, criminals have innovated – creating a wide range of new ways to commit fraud.
A recent article in the Financial Times quoted James Lews, an expert in cyber security at the Washington Center for Strategic and International Studies (CSIS), who stated that ‘you have no privacy when you use an online payment system. Your transactions are transparent in a way that they never were before’. This gives criminals new ways to defraud people.
McAfee, who produce security software, have also worked with the CSIS to estimate that cyber-crime has risen by 50% since 2018 to reach about 1% of global GDP.
A recent INTERPOL report on the rise in cyber-crime during the pandemic, meanwhile, used data from one of its private sector partners to illustrate the size of the challenge.
In one four-month period (January to April) it detected some 907,000 spam messages, 737 incidents related to malware and 48,000 malicious URLs, all related to COVID-19.
According to INTERPOL, with organisations and businesses rapidly deploying remote systems and networks to support staff working from home, criminals are taking advantage of increased security vulnerabilities to steal data, generate profits and cause disruption.
‘Cybercriminals are developing and boosting their attacks at an alarming pace, exploiting the fear and uncertainty caused by the unstable social and economic situation created by COVID-19,’ noted Jürgen Stock, INTERPOL Secretary General