GROWTH – DEDICATED CALL – 10/00
TOPIC IV.14
Euro coins authentication technology
1. CONFORMITY WITH THE WORK PROGRAMME
This topic falls under the Competitive and Sustainable Growth Programme, generic activity
Measurement and Testing. Specifically, it is related to Objective GROW-2000-6.2.2
Measurement and Testing anti-fraud methodologies for which expressions of interest have
been called, enabling the checking of the authenticity and the origin of products, components
and materials, as indicated in the work programme.
2. KEYWORDS
Authentication, anti-fraud, coin, counterfeiting, vending machines, micro-technology,
diffraction, micro-engineering, laser processing, materials science, manufacturing.
3. SUMMARY OF OBJECTIVES AND JUSTIFICATION
3.1 Objectives
3.1.1. Develop anti-fraud methodologies for quick screening as well as for providing reliable
evidence required for successful prosecution. The methodologies developed will enable the
authenticity of coins to be checked.
3.1.2. Improve the international competitiveness of European industry through the reduction
in losses due to counterfeit.
3.1.3. Ensure confidence in the Euro currency by providing coins with machine-readable
features that can be used for authentication in coin-operated machinery or in machineoperated coin authentication systems, as well as possibly for visual authentication.
3.1.4. Promote and apply the multi-disciplinary technologies of precision engineering, microengineering, material science, micro-electro-optical measurement systems, and precision
manufacturing.
3.2 Justification
The EU plans to produce some 70 billion new Euro coins in time for their circulation from
2002. In spite of – or due to - the use of sophisticated coin materials and technologies, the
operators of systems involving coin acceptors, including the over 7m vending machines in the
EU, are increasingly concerned that they may face a flood of counterfeits. A more
discriminating machine may on one hand increase false reject rates to a point to frustrate users
and add concerns.
The combination of both – the large quantity of circulated coins and the high number of
existing vending machines – represent a massive attraction for counterfeiters. Additional antifraud coin properties are therefore needed, which strongly discourage counterfeiters to
produce substitutes. In view of the large 400m people market and the long lifetime of the new
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coin, high-quality and high-security coins are needed.
technologies are to be used advantageously.
For this purpose, advanced
4. BACKGROUND
4.1 Coin Authentication Technology
The technical specifications of coins are primarily designed for human recognition and
authentication as well as for high resistance against wear. In a coin operated vending machine,
a specific valid coin must be positively authenticated, whereas an invalid or false coin must be
rejected. Within today’s state of the art, coin acceptors realise this task in the vast majority by
examining the mechanical, electrical and magnetic properties of the coins. Due to the high
diversity of false coins or substitutes with properties very similar to the genuine properties,
the coin discriminator devices must be set to very accurate values. This in turn demands for a
tight choice of primary materials as well as for accurate production processes. However, due
to variations in the production methods in the EU’s 15 mints, the bimetallic coins are likely to
have widely differing “electronic signatures”. Furthermore, whilst the current validation
systems rely heavily on the security value of the multi-element magnetic core of the coin,
experts fear that the security of the Euro coins could be seriously threatened in the long term
as the chosen core of the Euro coins becomes more widely available.
It is therefore increasingly difficult to realise coin acceptors with adequate discriminating
powers at acceptable investment and service costs. Adding to the coin distinctive properties,
which strongly discourage counterfeiters to produce substitutes, provides a solution to this
problem. The properties should be such that they can be “added” to the coin in the existing
currency manufacturing process as well as in a recirculating process for coins already in use.
This implies the development of a technology allowing for example the inclusion into the coin
of a machine-authenticatable mark and the development of small-size and compact automatic
mark-detection means. Marks intended also for recognition by human vision are also
alternatives to be considered.
The current electromagnetic sensing and dimensional measuring techniques of coin
authentication do not sense the surface profile of the coin; the suggested systems allow for the
measurement of microstructured surface-relief profiles as well as laser-created patterns on the
coin surface. The system should comply with low-cost principles as well for the production
processes and for the investment to be made in retrofitting the vending machines.
4.2. Coin Manufacturing
In modern minting methods, the sequence of coin manufacture, while improved, is very much
as the production methods used in the early part of the 20th century; the manufacture stages
stretch from the production of the dies to the embossing with coining presses. The proposed
projects focus on the development of radically new technology to the coin manufacturing
process. By applying precision engineering, micro-technology and laser processing to the
production chain, the projects aim to realise coins with dramatically improved security.
Whilst the die lifetime is upwards of 200,000 coins and whilst the spread of the metal under
the force of the die is a complex process, materials science is an important aspect of the
development. Both features which involve the processing of the die itself as well as features
involving the direct processing of coins will be considered.
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4.3. Laser Processing
Laser processing systems are now widely used in the manufacture within the electronic and
watch industries, microtechnology, and automobile industry. Lasers are reliable, cost-effective
precision tools which are used to drill, cut, weld, etc. as well as to render a surface relief
profile on the surface of a substrate. Excimer lasers are widely used in microlithography. In
most cases, a positive or negative photoresist is exposed and then developed by wet etching
techniques. The fundamental possibility of the combination of exposure and development has
been demonstrated for many materials including bulk metals and metal films. The application
of photoablation in lithographic processes is complicated by several circumstances: The
achievable resolution is limited due to low wall angles or thermally influences zones, the
surface is contaminated by redeposited debris and, although pulse durations may be in the
femtosecond regime, the process time can be considerable if many pulses are needed for the
ablation process. The projects will address these challenges and hope to solve them so that
photoablation becomes a viable means for an “all-dry” process for the microstructuring of
coins and/or dies. Furthermore, the treatment of bulk metals and of metal coatings with laser
light having specific properties can lead to localised differences in the optical, electric or
magnetic properties between the transformed and untransformed areas of the coin.
4.4. Micro-technology
Micro-technology is an enabling technology that can trace its origins to the silicon revolution.
The silicon revolution began over three decades ago, with the introduction of the first
integrated circuit. The integrated circuit has changed virtually every aspect of our lives.
While the growth in the functionality of microelectronic circuits has been truly phenomenal,
for the most part this growth has been limited to the processing power of the chip. MicroOpto-Electro-Mechanics (MOEMs) is the constructive interaction of electronics, mechanics,
and optics which exploit the existing microelectronics infrastructure and technologies to
create, for example, complex surface relief profiles with micron or sub-micron feature sizes
and microsystems with both size and cost advantages as well as offering new functionality.
Micromachining technology sculpts structures into a substrate with processes compatible with
standard VLSI batch processing. MOEMs is used to manufacture electromechanical
components, devices and systems that directly impact many existing applications.
5. ECONOMIC AND SOCIAL BENEFITS
5.1. Economic Benefits
Counterfeiting and piracy of consumer goods is costing the European Union as much as 400
billion Euro per year. Coins are not immune from counterfeiting. In Germany alone, 34
percent more counterfeited coins were confiscated between 1998 and 1999; in the same time
period, the number of confiscated counterfeit banknotes decreased by 38 percent, a decrease
attributed by the Bundesbank to the introduction of a diffractive feature to the banknotes.
Experts fear that the new Euro coins could lead to a flood of counterfeit coins that would
undermine confidence in the European Union’s new currency. Counterfeit coins already
burden the citizens of Europe: Counterfeit coins already cost the vending machine operators
up to 5 percent of their turnover. The Automatic Vending Association reports an average
turnover per vending machine of over 4’000 Euros per year; for the European Union, with
over 7 million vending machines, one can estimate a loss of up to 1.5 billion Euro per year
caused by counterfeit coins in vending machines. By incorporating visually authenticated
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coin features, further losses, stemming from the acceptance of counterfeits by humans, can be
reduced.
5.2. Social Benefits
European Citizen will profit from the numerous economical and social benefits that are
created by the new currency. To ensure the smooth and trouble-free use of the new coins,
intensive discussions took place - and still take place - between the European Commission
and representatives of consumer groups, institutes, industry, and national mints, proving the
intention to constantly improve the coins. Indeed, each Member State will establish a national
coin analysis center and a European Technical and Science Center (ETSC) will analyse new
counterfeit coins.
The concern of the coin-operated machine operators is that their machines have to be
programmed to accept a wide variety of coin specifications and thereby become vulnerable to
counterfeit substitutes. From the viewpoint of the methodologies for measurements and
testing this represents a well founded and objective worry. A massive counterfeit event would
inevitably lead to a blocking of the operation of vending and other coin-operated machines
and damage the public’s confidence in the new Euro coin. It would impair the vending and
other coin-operated businesses and the public confidence in the operation of these machines to
a point that the overall economic and social benefit would greatly suffer. It is of utmost
importance to keep the public’s welfare and well-being first in mind.
It is known that state and private operators of vending machines, which handle about 10% of
the yearly transactions, consider vending as a public service the. They want to operate
vending machines and related equipment in inspiring and sustaining customer confidence. A
flood of counterfeited substitutes could gravely compromise their mission. The development,
installation and operation of an efficient and performing coin authentication system as a solid
barrier against counterfeited coin substitutes would therefore undoubtedly represent an
appreciable economic and social benefit to the 400m users of coins in the EU. Adding
features to the coins, which effectively support machine and human recognition, would
furthermore positively affect the citizens’ confidence in the new currency.
6. SCIENTIFIC AND TECHNOLOGICAL OBJECTIVES
The project aims to develop anti-fraud features for coins and the industrial means for
integrating the features into Euro coins (at a cost much less than € 0.01 per coin) as well as
machines for testing these features and low-cost, LED-based reader systems (at
manufacturing costs well below € 100 per reader) for vending machines.
6.1. Anti-Fraud Devices for Coins based on Microstructuring
The microstructuring of coins increase the security of the Euro or other currencies since the
technological means of incorporating the structures into the surface of a coin lie beyond the
reach of the counterfeiter. The goal of the project is to realise features for coins, which are
resilient to counterfeiting, yet which allow mass-production by the European mints.
The proposed projects should study advanced technologies for the treatment of coin surfaces.
They should be evaluated on the basis of a technical analysis. The technical analysis should
be carried out in conjunction with European Mints, ETSC, technology experts, the EMU,
manufacturers of coin-operated machines as well as other coin and currency users. The
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technologies chosen for further study will be evaluated on qualitative and quantitative factors,
including those listed here:
-Uniqueness and security provided by the feature;
-Simplicity and ease of incorporation and verification;
-Compatibility with current coin authentication systems;
-Reliability and stability over time;
-Intrinsic safeguards and protection against technological compromise;
-Acceptable false-accept and false-reject rates; and
-All associated costs for the use of the technology.
Since coins have a lifetime of up to 25 years, issues of reliability, stability and resistance
against wear are of central concern.
6.1.1 Machine-Verifiable Micro-Structures
Diffractive optical micro-structures having periods on the order of 1 micrometer can be
brought covertly or semi-covertly into the metal surface of the coin. These structures are
intrinsic to the coin itself and allow the authenticity of the coin to be verified automatically
through optical means. By encoding the machine-readable diffractive optical code on the
surface, information can be permanently linked to the coin. This information can include the
country of issue, date, mint and denomination. The diffractive feature should offer
uniqueness and high-security while it can use micro-structures, which are virtually impossible
to copy, reoriginate, or imitate using standard machining and stamping tools.
6.1.2. Human- and Machine-Verifiable Micro-Structures
Optically Variable Devices will be used to secure the Euro bank notes against forgery and
counterfeit. The optically variable device exploits the diffraction of light by sub-micron
dimensional gratings. By properly composing the diffraction gratings into a design, these
features can be easily seen by the person on the street, can be easily verified by inspection and
can be resilient against standard counterfeiting means. Furthermore such micro- structures are
well suited for optical measurement techniques for automatic reading and authentication.
6.1.3. Human- and Machine-Verifiable Latent Images
Latent images have proven to be a feature that precludes various means of counterfeiting of
coins. It is possible to improve the security of the latent images by using more advanced
structuring of the surface, adding security to the latent image. Advanced microstructuring
techniques for the novel latent images must be developed which are resilient against
counterfeiting while allowing high-quality, low-cost production by official mints.
6.1.4. Human- and/or Machine-Verifiable Surface Patternings
By applying a high-power laser beam to the surface of a coin, it is possible to produce
localised melting of the materials so that a full or partial alloying of metal materials or other
changes in the structures of the materials which result in measurable or observable differences
in optical, electrical or magnetic properties between the treated and untreated regions. In the
case where there are two or more different coating layers applied to the substrate of the coin,
it can be that no melting of the substrate is involved.
6.2. Laboratory Demonstration of high-security Coins
The microstructuring of the surface of a coin can be accomplished through a variety of
technologies including: Laser ablation, Laser annealing, Micro-etching, Micro-erosion,
Direct embossing, and Micro-machining. The use of these, and further, technologies for the
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realisation of the machine-verifiable micro-structures and patterns will be studied first in the
laboratory environment, requiring the sciences and technologies of metallurgy, material
science, mechanical engineering, chemistry and physics. The goal is to determine the
feasibility of production of the various features, to estimate costs, to assess the environmental
impact, and to consider manufacturing, quality control and logistical scenarios for the
production of the coins.
6.3. Development of Coin Authenticators
Research Institutes and Industry must co-operate for the creation three classes of
authentication devices
- Low-cost, compact, and robust readers for vending machine, automata, etc.
- High-speed, robust readers for banks, collectors, emission/production sites, etc.
- Tools for forensic testing for providing reliable evidence for prosecution.
Coin authentication devices meeting the needs of the automat manufactures, vendors,
payphone operators etc as well as for banks, collectors, emission/ production sites, etc. are to
be realised by exploiting the following research fields: Diffractive optics and micro-optics,
Opto-electronics, Electro-mechanics; and Micro-opto-electro-mechanics (MOEMs). The
expected advantages of these technologies are a reduction in cost, size, and weight as well as
the improvement in reliability, accuracy, robustness, performance, upgradability and
functionality. Prototype coin acceptors are to be realised for the various authentication
means. Following prototype demonstration, the project is to determine the feasibility of the
reading devices in commercial application, to estimate costs in mass production, to assess the
environmental impact, and to consider manufacturing, quality control and logistical scenarios
for the production of the coin authentication devices.
6.4. Development of Production Means
The cooperation between official mints, researchers and industry will be required to develop
the means for manufacture of the novel high-security coins. The means should not only be
applicable for newly minted coins, but also for recirculated coins. This allows for a
retrofitting, or upgrading, of coins already in circulation. Whilst coin production involves the
manufacture of huge numbers of pieces, the economic and ecological ramifications of the
manufacturing means are of primary importance. The goal of this technical objective is the
manufacture of a representative number of beta prototypes using beta production tools and
means. For the manufacturing means, a study on the capital investments, on
tooling/equipment necessities, and on manufacturing scenarios is required. Quality assurance
issues as well as the environmental impact will be studied in depth.
7. TIME SCALE
Technical Objective 6.1, with an expected duration of 1 year, must be completed before
Technical Objectives 6.2 –6.4 are simultaneously initiated. The duration of the project is 36
months or shorter if possible, due to the urgency of the problem.