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Estimating the volume of counterfeit U.S. currency in circulation worldwide: data and extrapolation

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Abstract

The incidence of currency counterfeiting and the possible total stock of counterfeits in circulation are popular topics of speculation and discussion in the press and are of substantial practical interest to the U.S. Treasury and the U.S. Secret Service. This paper assembles data from Federal Reserve and U.S. Secret Service sources and presents a range of estimates for the number of counterfeits in circulation. In addition, the paper presents figures on counterfeit passing activity by denomination, location, and method of production. The paper has two main conclusions: first, the stock of counterfeits in the world as a whole is likely on the order of 1 or fewer per 10,000 genuine notes in both piece and value terms; second, losses to the U.S. public from the most commonly used note, the $20, are relatively small, and are miniscule when counterfeit notes of reasonable quality are considered.

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  • Ruth A. Judson & Richard D. Porter, 2010. "Estimating the volume of counterfeit U.S. currency in circulation worldwide: data and extrapolation," Policy Discussion Paper Series PDP-2010-02, Federal Reserve Bank of Chicago.
    • Handle: RePEc:fip:fedhpd:pdp-2010-02
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    1. Edward J. Green & Warren E. Weber, 1996. "Will the new $100 bill decrease counterfeiting?," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 20(Sum), pages 3-10.
    2. Yvan Lengwiler, 1997. "A model of money counterfeits," Journal of Economics, Springer, vol. 65(2), pages 123-132, June.
    3. Judson, Ruth A. & Porter, Richard D., 2004. "Currency demand by federal reserve cash office: what do we know?," Journal of Economics and Business, Elsevier, vol. 56(4), pages 273-285.
    4. Edgar L. Feige, 2005. "Overseas Holdings Of U.S.Currency And The Underground Economy," Macroeconomics 0501022, University Library of Munich, Germany.
    5. Porter, Richard D. & Weinbach, Gretchen C., 1999. "Currency ratios and U.S. underground economic activity," Economics Letters, Elsevier, vol. 63(3), pages 355-361, June.
    6. Susan Pozo (ed.), 1996. "Exploring the Underground Economy," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number eue, August.
    7. Jefferson, Philip N., 1998. "Seigniorage payments for use of the dollar: 1977-1995," Economics Letters, Elsevier, vol. 58(2), pages 225-230, February.
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    1. Pedro Gomis-Porqueras & Timothy Kam & Christopher Waller, 2017. "Nominal Exchange Rate Determinacy under the Threat of Currency Counterfeiting," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(2), pages 256-273, April.
    2. Judson, Ruth, 2017. "The Death of Cash? Not So Fast: Demand for U.S. Currency at Home and Abroad, 1990-2016," International Cash Conference 2017 – War on Cash: Is there a Future for Cash? 162910, Deutsche Bundesbank.
    3. Feige, Edgar L., 2011. "New estimates of U.S. currency abroad, the domestic money supply and the unreported Economy," MPRA Paper 34778, University Library of Munich, Germany.
    4. Ruth A. Judson, 2012. "Crisis and calm: Demand for U.S. currency at home and abroad from the fall of the Berlin Wall to 2011," International Finance Discussion Papers 1058, Board of Governors of the Federal Reserve System (U.S.).

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    Keywords

    Counterfeits and counterfeiting;

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