The number of fake £1 coins in circulation has doubled in the last five years and now stands at more than 30 million, the BBC has learned.[From BBC NEWS | UK | Number of fake £1 coins ‘doubles’]
It seems like a reasonable business to be in, if the figures given in respect of the recent arrest of a counterfeiter are correct:
It is thought that at one stage he was making 10,000 to 12,000 coins per day and was paid about £2,000 in cash a week by the two men.[From BBC NEWS | England | London | Man jailed over 14m fake £1 coins]
I wonder how much it costs the Royal Mint to make a £1 coin? Anyway, the reason why this story is worth mentioning here, is because one of the experts quoted in, Mr. Robert Matthews (until recently the Queen’s “Assay Master”), says that 2% is the threshold at which people become nervous and begin to feel uncomfortable about accepting coins. At this point, Gresham’s Law steps in to drive the good coins out of the marketplace and confidence in the circulating coin of the realm collapses. The Royal Mint rather unhelpfully say that if you find yourself with a counterfeit coin you should not attempt to spend it, but that is of course precisely what any sensible person will do with it, since as a rational economic actor I want to dump bent coins on mug punters at the first opportunity, carefully stashing away the coins that I know to be authentic. Oddly, The Royal Mint also say that this counterfeit incidence is “comparatively low” by global standards, which it may be when compared to some developing countries but it is not when compared to the forgery rate for euro coins, which is down at 0.1%. More to the point, it’s considerably higher than the retail card fraud rates, which are well under 1% (card-not-present fraud is much higher).
Since we can no longer execute people for counterfeiting, we need to find alternative methods. Fortunately, a solution to the problem of counterfeit coins is at hand:
THE days when iron slugs and Chinese taels could safely operate the turnstiles of the New York subways is past, for the transit company has recently equipped the coin boxes controling the turnstiles with lenses that magnify the coins to twice the size of a silver dollar. This makes it possible for inspectors to detect spurious coins at a distance of 15 feet from the machine.[From Lens Detects Bogus Coins in Subway]
It’s just this kind of technology that will restore public confidence in the coinage. Meanwhile, I wouldn’t want to use coins at all in Greece… can any digital money denizens tell me whether this sign is real or not? And, more disturbingly, if it is real, what does it mean? (Many thanks to spotter Pete Jones).
These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]