Euro notes may be radio tagged

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Radio tags the size of a grain of sand could be embedded in the euro note if a rumoured deal between the European Central Bank (ECB) and Japanese electronics maker Hitachi is signed. The firm has leaked to Japanese news agency Kyodo that the ECB has started talks with it about the use of its radio chip on the note. The ECB is deeply concerned about counterfeiting and money laundering and is said to be looking at radio tag technology. Last year, Greek authorities were confronted with of 2,411 counterfeiting cases and seized 4,776 counterfeit bank notes while authorities in Poland nabbed a gang suspected of making and putting over a million fake euros into circulation. To add to the problem, businesses also find it hard to judge a note's authenticity as current equipment cannot tell between bogus currency and old notes with worn-out security marks. Among the security features in current euros are threads visible under ultraviolet light. "The main objective is to determine the authenticity of money and to stop counterfeits," said Prianka Chopra, an analyst with market research firm Frost and Sullivan in report published in March. "RFID (Radio Frequency Identification) tags also have the ability of recording information such as details of the transactions the paper note has been involved in. It would, therefore, also prevent money-laundering, make it possible to track illegal transactions and even prevent kidnappers demanding unmarked bills," Chopra said. Besides acting as a digital watermark, the use of radio chips could speed up routine bank processes such as counting. With such tags, a stack of notes can be passed through a reader with the sum added in a split-second, similar to how inventory is tracked in an RFID-based system. The euro came into circulation on 1 January last year, with 12 countries adopting it as standard currency. These are Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal and Spain. If the ECB-Hitachi deal proves successful, the project could involve the use of tiny radio tags, a feat which Hitachi claims to have already achieved. In February, the Japanese firm said it has successfully operated the world's smallest non-contact chip measuring only a third of a millimetre across. Hitachi said its so-called "mu-chip" is capable of wireless transmitting a 128-bit number when radio signals are beamed at it. In a euro note, the number could contain a serial code, as well as details such as place of origin and denomination. Data can only be written on the chip's ROM during production, and not after it is out "in the wild", the company said. Hitachi's minuscule chip has been selected for use in admission tickets for Japan's international expo, which will be held in the country's Aichi Prefecture in 2005.
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